When Will The Recovery Begin? Never.
Unfortunately, V-shapers are looking back at the wrong recessions. Focus on those that started with the bursting of a giant speculative bubble and you see slow recoveries. The reason is asset values at bottom are so low that investor confidence returns only gradually.
That's where the more sober U-shapers come in. They predict a more gradual recovery, as investors slowly tiptoe back into the market.
Personally, I don't buy into either camp. In a recession this deep, recovery doesn't depend on investors. It depends on consumers who, after all, are 70 percent of the U.S. economy. And this time consumers got really whacked. Until consumers start spending again, you can forget any recovery, V or U shaped.
Problem is, consumers won't start spending until they have money in their pockets and feel reasonably secure. But they don't have the money, and it's hard to see where it will come from. They can't borrow. Their homes are worth a fraction of what they were before, so say goodbye to home equity loans and refinancings. One out of ten home owners is under water -- owing more on their homes than their homes are worth. Unemployment continues to rise, and number of hours at work continues to drop. Those who can are saving. Those who can't are hunkering down, as they must.
Eventually consumers will replace cars and appliances and other stuff that wears out, but a recovery can't be built on replacements. Don't expect businesses to invest much more without lots of consumers hankering after lots of new stuff. And don't rely on exports. The global economy is contracting.
My prediction, then? Not a V, not a U. But an X. This economy can't get back on track because the track we were on for years -- featuring flat or declining median wages, mounting consumer debt, and widening insecurity, not to mention increasing carbon in the atmosphere -- simply cannot be sustained.
The X marks a brand new track -- a new economy. What will it look like? Nobody knows. All we know is the current economy can't "recover" because it can't go back to where it was before the crash. So instead of asking when the recovery will start, we should be asking when and how the new economy will begin. More on this to come.
A little realism at last. Krugman must have won you over.
July 9, 2009 6:20 PM | Reply | Permalink
Given its origins, this recovery is likely to be W-shaped.
July 9, 2009 7:39 PM | Reply | Permalink
Spot on.
July 9, 2009 8:19 PM | Reply | Permalink
Thank you. Now, watch this drive.
July 9, 2009 8:41 PM | Reply | Permalink
I predict a Nike Swoop shaped recovery.
When?
When the technology comes on line that will make energy virtually free. It's going to happen, sooner or later, but those who make their living on energy will fight like Blue Cross against a public healthcare option.
July 10, 2009 9:27 AM | Reply | Permalink
Hey, what about the technology the makes everything virtually free? Won't that be nifty? It'll be super niftiness as far as the eye can see!
July 11, 2009 6:22 PM | Reply | Permalink
I think Obama is counting on a pony-bubble to save the market.
July 13, 2009 10:06 AM | Reply | Permalink
ROTF
July 10, 2009 12:58 PM | Reply | Permalink
TFF
July 10, 2009 12:59 PM | Reply | Permalink
Yeah, for William Jefferson Clinton ... meathead.
July 10, 2009 6:45 PM | Reply | Permalink
The truth hurts. But this is what we need to hear. Thank you, and keep your head low
July 9, 2009 6:32 PM | Reply | Permalink
Who will voters blame in 2010 if economic conditions do not improve?
http://www.youpolls.com/details.asp?pid=5711
.
July 9, 2009 11:19 PM | Reply | Permalink
I think they'll blame you and your ceaseless spamming.
July 10, 2009 12:09 PM | Reply | Permalink
Lol, too true.
July 10, 2009 1:29 PM | Reply | Permalink
GREAT icon!
July 10, 2009 7:25 PM | Reply | Permalink
Thanks! It's the Black Eye galaxy.
July 10, 2009 7:59 PM | Reply | Permalink
July 9, 2009 6:32 PM | Reply | Permalink
I completely disagree with your figures, "ordinary". We're looking at maybe 5% living in opulence and 95% scratching out an existence.
July 9, 2009 6:36 PM | Reply | Permalink
Twenty percent sounds more reasonable than five to me.
After all, there will be lots of spinsters and swineherds and lobbyists and candlemakers and gamekeepers and insurance salesmen and hedgefunders (&c. &c.) who will have to LIVE amidst the fabulous splendors of Rancho Crawford and Castle Podhóretz and Château du Tchéney without being much more refulgent themselves personally than peasants out beyond the moat.
Twenty percent also recommends itself as being (I presume) about the irreducible minimum vote for Republican Party extremism. [1]
Happy days.
___
[1] The five-percent solution does have some appeal, though, as answering a slightly different question, namely, "What is the ratio of GOP dupers to GOP dupes?"
1:3, 5 percent to 15 percent, is the answer implied, though that seems pretty low to me.
Or, as Comrade Th. Frank likes to wonder, "What's the matter with Kansas?"
July 10, 2009 6:22 AM | Reply | Permalink
The fact is, if you are in the United States, you have already been a part of that five percent your entire life. As others have noted, globalization and the free availability of information are going to cause the rest of the world to improve their standards of living. The drawback for the US is that for the rest of the world to make a 10% improvement in their standard of living, the US standard of living will have to drop by 80% ...
July 10, 2009 3:24 PM | Reply | Permalink
What does the new economy look like? I'm really intrigued by this new idea of deconstruction of the old, delapidated homes in ailing cities as a stimulus project. Tear the buildings down, and plant trees. Return the land back to nature. Really hope this takes off... "Demolition Means Progress"
http://www.nytimes.com/2009/04/22/business/22flint.html
July 9, 2009 6:40 PM | Reply | Permalink
Does seem an intriguing idea. Not in the town where I live -- Tucson, Arizona -- which continues to grow and will eventually catch up to the overbuilding. But in shrinking cities of the northeast and upper midwest, I think it makes a lot of sense.
July 9, 2009 8:47 PM | Reply | Permalink
the concept can work in tucson, too. it just has to be re-engineered as a solution to urban sprawl. instead of demolishing old buildings, we can just tear down new ones.
July 10, 2009 9:41 AM | Reply | Permalink
It could work if community leadership allowed it to. But developers still run this state (AZ). They may be down at the moment, but not out for the count.
July 10, 2009 12:45 PM | Reply | Permalink
Parallax857: I've been to Tucson many times... Love it there! There really are a ton of people there.
July 10, 2009 11:38 AM | Reply | Permalink
The more important question would seem to be what the new government will look like. The current system is beyond repair. Democrats & Republicans are the same critter -just tools of the corporations. We can't create a new economy without a new government. We need term limits, public financing of campaigns, a return of the fairness doctrine and the promotion and inclusion of multiple parties (with second choices to resolve majorities) for starters. None of this will happen without people in the streets or a general strike. Yawn, I guess I'll see what's on the Late, Late Show.
July 10, 2009 12:08 AM | Reply | Permalink
beamreach: I would definitely like people in the streets raising hell. You're right: The oligarchs are not afraid of the masses in any way shape or form. This is why nothing changes so far...
July 10, 2009 11:40 AM | Reply | Permalink
If we get a decent health care bill that will go a long way toward closing one gaping hole in the social safety net and it will increase economic security.
July 9, 2009 6:41 PM | Reply | Permalink
This is a fact that doesn't get the emphasis it deserves. A 21st century health care system would be a huge stimulus both to businesses and to individuals. And, the cost would be minimal, compared to what we spend now on health care. About the only ones to see an increased cost will be the very young and very healthy, who simply don't see a need for health insurance today, so they don't have it. That is comparable to not starting to save for retirement until you start planning retirement - age 40 or so.
July 9, 2009 8:38 PM | Reply | Permalink
"And this time consumers got really whacked."
No. Investors got whacked. Consumers borrowed out the yin-yang to run the economy overboard, and were swept overboard too. Faulty borrowing screwed investors when debtors stopped paying back the interest, and principal, on the loans used to live high (or to stall collapse).
Okay, maybe that picture is a bit overboard on the overboard theme. The point is that the economy was overinflated for many years based on unsound consumer borrowing and expectations. And so producer borrowing was sucked in too, as producers geared up for future fantasy consumption. Fortunately it looks like only a few trillion which if amortized over 3-4 years is only a big hit not a total loss.
The trillions of excess apparent GDP which were in reality just churning and fluffing require a major renormalization of effective real GDP and expectations.
I don't see why something like an L is not the correct shape regardless of what kind of economic structures emerge.
July 9, 2009 6:43 PM | Reply | Permalink
Bull. Citizens weren't borrowing too much. They were being paid increasingly in credit rather than cash. And they were spending their pay as they always have. While the GDP per capita doubled between 1970 and 2000, per capita income stayed flat. But credit was paid out so that most could share in the prosperity, and consumption could increase for all, keeping the consumer economy expanding.
It was totally reasonable for people to spend their credit. There was real wealth in the overall system to cover it - all that increase in GDP. What was unreasonable was to get suckered into living in a company town, spending at the company store - which is on the larger scale what the scam was. Yeah, we can't go back there now.
Refuse to work for credit. Demand wages. But if you can't afford not to work, and all they agree to pay you is credit, take it. Spend it all. Stick them with the loss if things go bad. It's entirely fair and sane to play that way.
July 9, 2009 7:29 PM | Reply | Permalink
Explain what you mean by "being paid with credit." I get a paycheck, and every working person I know does. Other than in California as of last week, where they are issuing "IOU's" I've never heard of being paid with credit.
July 9, 2009 8:24 PM | Reply | Permalink
I know plenty of people who have maxed out their credit cards and pay only the minimum payment, which only increases their debt, as a minimum payment often is less than the monthly interest. That is "borrowing too much" in my book.
July 9, 2009 8:27 PM | Reply | Permalink
sounds like the poster is saying money=credit.
Since the dollar is backed by the full faith and credit of the government, there is a grain of truth but also a grain of lie in that post.
The poster is probably a fan of Austrian economics and/or fears hyperinflation.
July 9, 2009 8:52 PM | Reply | Permalink
But he says this:
"Refuse to work for credit. Demand wages."
I can't make any sense out of what he's saying, and I don't think you do either, because if he equates money with credit, why would he say to demand wages?
Thanks for trying to clarify, but I still think the intent is a mystery. I hope he comes back and answers.
July 9, 2009 8:58 PM | Reply | Permalink
wages are paid in goods or "sound money" aka gold or food etc. not in money=credit.
That's how I'm reading it (in an attempt to "credit" it with sense!!)
July 9, 2009 10:09 PM | Reply | Permalink
That's a stretch -- demand to be paid in gold? I'm waiting for an explanation from the guy who wrote this, because who in the world is paid in gold?
He said, "wages."
I appreciate your efforts, but I'm not sure you've nailed it yet.
July 9, 2009 10:56 PM | Reply | Permalink
Meaning, we have allowed credit to replace living wages. Demand higher wages rather than using easy credit to supplement inadequate remuneration.
July 10, 2009 9:35 AM | Reply | Permalink
Precisely !
C
July 10, 2009 10:55 AM | Reply | Permalink
Not that hard to understand, if inartfully stated. Productivity doubles but real wages stay flat. To fill the demand gap, encourage borrowing, which consumers did with increased consumer credit and home equity lines. Hence the idea of "being paid with credit". Roughly analogous to what Reagan, Bush 41 and Bush 43 did to keep government spending (especially military spending) high while also cutting taxes.
July 10, 2009 1:05 AM | Reply | Permalink
Exactly. The difference in wages was made up by easy access to credit.
July 10, 2009 9:33 AM | Reply | Permalink
Bingo. This also answers eds and CVille Dem's questions above.
July 10, 2009 9:36 AM | Reply | Permalink
Not easy access to credit, easy access to debt.
July 11, 2009 5:31 PM | Reply | Permalink
Don't forget Bill Clinton. He was hardly a paragon of progressive policies. Bubbles grew on his watch as well, with most of the pain to come a direct result of his leadership. No party is immune from criticism in examining the last 40 years of piss-poor performance.
July 10, 2009 9:38 AM | Reply | Permalink
He also got a hummer in the White House.
Lucky bastid!
July 10, 2009 11:03 AM | Reply | Permalink
Real wages for the middle class and lower increased for the first time in decades under Clinton. Something over 7K on average over the course of his presidency, as I recall. Bush II was the first president in modern history who presided over a decline in real wages--on the ordre of 2K per family--for the middle and lower class over the course of a recovery. Bush threw a recovery and everyone but the very rich saw their wages go down. Think about that.
Quite simply, it happened because the Bush tax cuts, combined with the tax-subsidized exporting of jobs, represented a direct transfer of wealth from the lower and middle classes to the rich.
And, as they always have done whenever an upward redistribution of wealth happens, they used it to create speculative bubbles rather than investing it in something that created real wealth.
Indeed, in a real sense the Bush "recovery" was really just a long continuing recession in which they fraudulently generated the psychology and data points that economists ordinarily associate with a recovery by borrowing a lot of money and giving to rich people so they could pumping it into ponziesque asset bubbles.
July 10, 2009 12:21 PM | Reply | Permalink
I disagree with this particular view of the historical record as it leaves out many important data points that put any supposed gains in the proper perspective.
Down the line, just about every one of our basic necessities cost twice as much post-Clinton as they did pre-Clinton, despite any slight increase in wages for certain sectors of the information economy. Wages increased for those lucky few with the right degrees, but Clinton's economic policies led to the path of destruction in the middle class that we are living with today.
The working poor may have been created by Reagan's policies, but Clinton did little to stem that trend. The gains made in the 1990s had nothing to do with Bill Clinton's White House or with Newt Gingrich's House of Representatives. They were the beneficiaries of the Information Technology revolution and the productivity gains that came with it. The scraps that fell from that table were nothing compared to what the clowns at the top made off with in the 90s.
George Junior and Darth Cheney made multiple mistakes that led to the pain we are feeling today, but the ticking time-bomb for the middle class was set into motion well before they took office. That nothing was done to change direction is no surprise but it hardly absolves those who came before. I suspect it is why Gore didn't fight too hard to assume the presidency. He knew what was coming as he had a front-row seat to the prologue.
No presidential administration exists in a vacuum but must inherit the sins and successes of the ones that came before.
July 10, 2009 12:59 PM | Reply | Permalink
The CPI was subtly changed under Clinton: food and energy costs were taken out of the basket.
The government -- both sides of the aisle -- have been cooking the books since Reagan to make us feel better about a worse situation.
July 10, 2009 1:15 PM | Reply | Permalink
Exactly. They took necessities out as if they were optional to a basic standard of living. Cooking the books has been the federal government's MO for decades.
July 10, 2009 1:27 PM | Reply | Permalink
Jason, CT, and NC--I'm recommending this post just for this line of conversation.
July 10, 2009 1:37 PM | Reply | Permalink
As long as you are doing that, then may I suggest you read BAD MONEY by Kevin Phillips? It turned out to be quite prescient but also discusses how we got here.
July 10, 2009 2:13 PM | Reply | Permalink
Thanks. Just reserved it at the library.
July 10, 2009 3:01 PM | Reply | Permalink
No arguments here. Clintonomics was a, er, kinder and gentler version of Reaganomics. And the tech bubble happened on his watch (as Goldman Sachs made off like bandits, as usual). No administration since Reagan took office has seriously tried to reverse the train wreck that is Reaganomics. That's partly because the right wing still largely controls the debate, partly because the money flows pretty much equally to Democrats and Republicans in Washington, and partly because K Street and Wall Street don't much care whether you have a D or an R after your name, both while you are in elective office and after you "leave" via the revolving door to take a seven-figure lobbying job.
Sadly, Obama appears to be following the same path.
July 16, 2009 1:15 AM | Reply | Permalink
That's why I don't think it is a left wing or right wing thing as much as it is the corporate wing screwing all of us, regardless of party. We need all of us, left and right, to demand better of both parties.
July 16, 2009 9:27 AM | Reply | Permalink
It's simple, but first you have to realize the centrality of the fact that middle class and working class incomes have stagnated and largely decreased over the last 30 years, while the increased wealth created by their long working hours and greater productivity was siphoned upward into the upper-upper middle and wealthy classes.
So instead of getting paid what their work was worth, the middle and working class people were "paid" with credit to make up the difference between the lesser amount they received and the greater amount they deserved.
Yes, it's a class warfare thing, and the rich have been winning like crazy, and even issuing their economic lessers credit to live "the good life" (so as not to notice as acutely the increasing gap between rich and not rich) results in even more money being siphoned upward into the hands of the rich, derived directly from all that credit card interest and penalties, not to mention underwater mortgages.
It's a sweet scam if you're rich enough. It's the drudgery and hopelessness of the workhouse for the not rich.
And the rich have been able to so easily perpetrate their grand ponzi scam for so long, because people like you who can't understand what "being paid in credit" means haven't been paying attention to what's real and what's important, and what's important is making life and opportunity as fair as possible for as many people as possible, which is what the rich have been working against since history began.
So educate yourself and figure things out for yourself, help a brother and sister out, and don't discount people who tell you what's really happening. Only then will you quit being suckers and stooges for the rich, and only then will you be of any good to society or yourself and loved ones.
July 10, 2009 2:36 AM | Reply | Permalink
Thank you for the advice. Now jam it up your ass.
July 10, 2009 11:04 AM | Reply | Permalink
Sorry to be so direct, but calling out everyone as worthless suckers got me going a bit.
July 10, 2009 11:49 AM | Reply | Permalink
"They were being paid increasingly in credit rather than cash."
Herein lies the crux of the X...
Higher wages are the "cash" wyt is talking about here. If the uber-wealthy had understood the 21st Century global economy, rather than living in the 19th Century when THEY were the major consumer class, not the middle class, they might have upped those wages instead of investing in easy-credit investment instruments.
And the middle class would have disposed of that income graciously, enriching the rich AND the middle class and bringing the poor up out of the pit.
But instead, "they" (the uber-rich) hired "creative accountants" (read "book cookers") to create the derivative markets based on overpriced properties and "under-incomed" individuals.
So now EVERYONE suffers but the no-bidders, because the greedy rich (as opposed to the enlightened rich) just don't know how to share, or how to benefit from that sharing.
wyt's right; higher wages for the middle class instead of tax cuts for the wealthy class at the turn of the millennium would have prevented this crash, and might have initiated a real perpetual motion economy, instead of this 18th Century stop and go, up and down debacle we now suffer.
And even the uber-rich would have benefited, quite handsomely.
July 13, 2009 1:45 PM | Reply | Permalink
EDS,
Consumers didn't cause the whole system to crash. It was the Financial Sector. All of those masters of the universe and the banksters. They had leveraged themselves beyond repair and couldn't handle the housing crash. If they hadn't been leveraged up to their eyeballs, they could have weathered the storm. Citigroup, AIG, Bear Stearns, Goldman Sachs, etc. They played Casino Capitalism with OPMs, and a lot of execs made billions, even though their companies lost trillions. Then the government bailed them out. We socialized their losses, their risk, and let them keep their blood money. Sent them trillions to do so. We sent trillions to billionaires, so billionaires could send millions to millionaires.
Meanwhile, individual average Joes and Janes lost everything, and there was no bailout for them.
The Financial Elite want people to think it was the fault of the average consumer. If people woke up and really looked at the wizards behind the curtain, really scrutinized what they've been doing for decades, they'd march on the castle. And those big execs know it. So they're pretty happy that people like you repeat their talking points. Though, you aren't among the worst by far I've seen.
The worst blame the poor and minorities, having drunk Financial Elite koolaid for much too long. It sounds like you've taken a few sips at least, though . . . .
July 9, 2009 8:58 PM | Reply | Permalink
Some "Joes and Janes lost everything" but they're a minority. And that's why "there was no bailout for them."
Divide and Conquer.
July 9, 2009 9:21 PM | Reply | Permalink
Actually, they outnumber the financial elite who received the bailouts.
The difference is obviously power, access, and money. People without those things aren't going to get urgent attention. If any attention. The financial elite get that attention, immediately.
We outnumber them by a huge amount. Obviously. Yet we let them treat us like a minority . . .
Americans are suckers. And it's astounding when average Joes and Janes actually defend the financial elite.
July 9, 2009 9:43 PM | Reply | Permalink
precisely
it's Vegas, baby, the House always wins, even when it loses
so the bible says, and it still is newses
I'm still hoping Obama will stick it to Big Finance; they have it coming.
I know...dream on!
July 10, 2009 2:45 AM | Reply | Permalink
Your post is so confused it's hard to start anywhere.
Besides being ad hominem and thoughtless, it looks most like a personal riff on a long tangent from what I wrote. If it were meant as a direct reply, I have to say you're confusing 2000-2007 with the crash of Sept. 2008 and following. It's also not at all clear what we have "given" companies besides loans and equity purchases which seem to be in process of being paid back (small steps).
And on and on and on...
July 9, 2009 10:13 PM | Reply | Permalink
The point is that the economy was overinflated for many years based on unsound [investor lending] and expectations.
Better?
July 9, 2009 10:50 PM | Reply | Permalink
No. I already gave investors credit for error.
There is not enough emphasis on the consumer side of the problem of an economy floated on unsound borrowing. If investors default (somehow) then we can look at your version a bit more. But consumers are taking advantage of the laws to default on contracted obligations, fault or no-fault.
July 11, 2009 5:29 PM | Reply | Permalink
The "symbolic analyst", manufacturing-less, outsourcing economy wasn't such a good idea after all, now wasn't it?
July 9, 2009 6:46 PM | Reply | Permalink
All we know is the current economy can't "recover" because it can't go back to where it was before the crash.
Wow!Well said.How can we have a recovery when we don't even manufacture anything in "amerika" any more.Selling slips of paper on wall street rewards the upper crust not the majority of ordinary americans who can't find "werk".
July 9, 2009 6:47 PM | Reply | Permalink
America is still the largest manufacturer - measured in total value of goods produced - in the world. You really want to compete with the Chinese to make the toys that 50 years ago were made in Japan?
July 9, 2009 7:31 PM | Reply | Permalink
The Chinese make a whole lot more than just toys. My IBM Thinkpad, vintage 2004? Made in China. And that was before IBM sold their laptop business to the Chinese company Lenovo.
The Cuisinart coffee maker I bought for my office last year? Made in China. The ViewSonic monitor for my office PC? Made in China. (I suspect the PC itself is as well, but I can't upend it to check.) The Cisco IP phone on my desk? Made in China. The USB to parallel adapter for my printer? Made in China.
Just try to find anything made in the USA any more. It's very difficult.
July 10, 2009 12:55 AM | Reply | Permalink
Just try to find anything made in the USA any more. It's very difficult.
Which is precisely why the recovery won't happen.
To have a recovery you need jobs and to have jobs you need to actually make something and we don't.
C
July 10, 2009 9:13 AM | Reply | Permalink
This is right on target.
What happened to Bob Reich calling for us to be a Nation of technocrats and analysts?
Huh? Bob?
July 10, 2009 11:06 AM | Reply | Permalink
What will the new economy look like?
A green energy and living overhaul - an industrial and manufacturing base to supply it all. Wealth based on work, money based on a product...not based on financial magic tricks. It means slower growth, but stronger growth.
And a Space Economy. No, not space tourism. Exploration, new resources, and new technologies. The Space Economy is what we need to strive to reach. That's the "next" step. The green gets us there, since the Space Economy is still a ways away.
That's where we HAVE to go if we want to prosper in the long run. Will we? I don't know, but I hope so. As for the current recovery...I agree with you (and most other realists). Everything was overpriced, and we're seeing a correction, not a recession.
My guess? A capital "L" shaped recovery...with a slight raise in the leg. Things will grow, but hopefully in slower and more stable way. The issue with "V" and "U" is they get us right back where we were...ready to fall.
July 9, 2009 6:58 PM | Reply | Permalink
Ack!
July 10, 2009 12:57 AM | Reply | Permalink
If my moniker was Shaggy I'd say "Zoinks!"
(or if Scooby: "Ruh Roh!")
July 10, 2009 2:21 PM | Reply | Permalink
The brutal truth. Mr. Reich is brave enough to acknowledged that,yes, there is indeed an elephant in the living room.
I've wondered for a long time what was driving the economy. I heard it was *services*, but didn't understand how services would be enough to build a thriving economy like we had post-WWII. Guess what. It wasn't enough.
July 9, 2009 7:01 PM | Reply | Permalink
I am one of the few that didn't think Obama had superhuman powers that would enable him to affect the economy one way or another.
I am just relieved that we have someone marginally interested in all facets of our economy instead of pushing a singular agenda to benefit a few.
I wanted intelligent representation in the White House, even an Obama failure is better than the trajectory we were on.
(P.S. big fan here Mr. Reich)
July 9, 2009 7:07 PM | Reply | Permalink
I second that sentiment.
July 9, 2009 7:36 PM | Reply | Permalink
Third. But I wish he would nail the SOB's that
--outed Valerie Plame
--started torturing people in our name
--lied us into war
I know it's off topic, but truthfully, I think if those things were done we would all feel like the country had a collective bath, and could dry off and get going!
Want to see entrepreneurs get our country going again? Remove the sledgehammer of health care from all our worries and sit back and watch! The fear of unaffordable health care has done more to discourage innovative small business than anything else.
July 9, 2009 8:33 PM | Reply | Permalink
It's amazing that righties who loved Bush and Cheney hate Obama so much. They should thank their lucky stars that Obama is keeping them safe and out of jail.
Obama has it in his power to make them do the perp walk. Easily.
Cheney, just for his assassination squad alone, would get life. Bush for his secret, illegal surveillance programs, constant lies about that progam, and his manipulation of a nation into war.
More than a few righties talked about Iraqis being "ingrates" for cheering on our recent exit from Iraqi cities.
The real ingrates are Bushies who attack Obama, the guy who keeps their boys out of jail.
July 9, 2009 9:06 PM | Reply | Permalink
No, this is not the problem at all. It's a nice faux rallying point, but it's not reality.
The problem is that there is no money to float the companies. Banks aren't lending. US Venture Capital is flooding money into China and foreign companies. Also, VCs are far more lemmings than cowboys. Also, the VC world is changing dramatically (as so many business structures are) and it's not even possible to launch a business the way you could 10 (and even 20) years ago.
The fact is that money is the grease for innovation -- and right now we are being frictioned to a stand still.
It has nothing to do with health care.
July 10, 2009 1:36 AM | Reply | Permalink
I wouldn't say it has nothing to do with health care. Innovation can come from existing businesses freed from the albatross of covering their employees. It isn't all about venture capitalism to be an entrepreneur. In fact, most business are started with no VC funding at all.
July 10, 2009 9:42 AM | Reply | Permalink
Let's be clear about what businesses we are talking about.
First, if you only have a few employees and are talking about a web *service*, you aren't going to be bothered by health care issues. Your "employees" can be guns for hire and therefore not a burden to you.
If you are truly talking about making things, you will need some form of money, VC or bank lending to cover manufacturing costs and build sales network.
If you are starting a restaurant or a similar service business, you will not be "innovating".
So, while some of your comments are fine under certain conditions, we need to be clear about what we are talking about.
To be an entrepreneur to "save" the country (e.g. green business), you will definitely be needing capital. And that is in serious short supply these days.
July 10, 2009 12:57 PM | Reply | Permalink
I could "make" stuff via partnerships and never own a single piece of gear. There are a million and one ways to start a business - from five to fifty to five thousand employees.
The business could include a mix of contractors and staff and vendors, each with their own needs and requirements. A business can go from zero to a buck-twenty overnight or it can grow organically over a number of years. It can be done part-time while working for someone else or through individual investors (a Friends & Family round) or via venture funding for a large infusion of capital.
You are still doing that weird Either-Or thing that fails to take in the complexity of what we are discussing.
July 10, 2009 1:14 PM | Reply | Permalink
This costs money, unless your partners are shady and simply "trust" you.
Contractors and vendors don't require health insurance. Again, you prove my point that health insurance is not the issue impeding business formation.
Hardly. In fact, I'm trying to get you to be specific. By most of the comments I see on TPM regarding business, I'm betting that most that post here don't run a small business, or if they do, don't "make" things but rather provide a service.
Providing a service is fine -- but it's not the type of entrepreneurial endeavour to help the country that CVille implied in the original comment.
I think we can safely say that at this moment the notion of a "service economy" didn't work out too well. Now that we have to build our business infrastructure, we will require real capital. You can't build factories, or contract out to them, without having cash backing. That's a fact, Jason. I know that "virtual engineering" is all the rage -- and just as misguided an idea as back in the day when I was told that "brick and mortar" was a thing of the past.
July 10, 2009 2:10 PM | Reply | Permalink
Granted. I still think taking health care costs out of the equation would change the nature of entrepreneurial efforts as well as the risk some are willing to take to go down that road in the first place.
July 11, 2009 9:28 AM | Reply | Permalink
In my case, it does. I am putting off starting my business for a number of reasons, one of which is the cost of healthcare. With a public option available and my healthcare no longer tied to employment, much less the need to provide healthcare to my employees, I'll feel safer making that leap.
But the other thing holding me back is lack of money. I don't want or need capital VC venture capital. But if I weren't spending so much on healthcare today, I could afford to save more and eventualy put my own money up for the venture.
July 10, 2009 9:42 AM | Reply | Permalink
Please see my comment above.
Talking vague generalities will make the conversation hard to move forward, so I'm happy to discuss specifics.
July 10, 2009 12:58 PM | Reply | Permalink
Isn't the dirty little secret (so far as media and politicians are concerned) the fact that it's impossible to sustain a free market capitalist consumer-based economy when wealth gets over-concentrated at the top of ladder? Seems to me like the 5% have a choice - they can accept making more money than they'll ever be able to spend rather than more than they'll ever be able to spend + 20% or whatever, and we can have a functioning economy, or they can own everything and forget about having a functional economy which will have the perverse effect of making everything they own worth less. Income redistribution is the scariest marionette in Right-Wing Hysteria Puppet Theater, but hey, if we're going to have any kind of an economy, it's going to have to happen - either because businesses voluntarily decide to pay employees a bit more and their shareholders a bit less, or through much higher taxes on the wealthiest.
July 9, 2009 7:09 PM | Reply | Permalink
Yep. You have to feed the beast so to speak.
I think the Democrats need to practice some Compassionate Capitalism.
July 9, 2009 7:46 PM | Reply | Permalink
The top 50% paid 96% of all income taxes. The Walton family (Walmart) was worth more than the bottom 100,000,000 Americans. That was before the crash.
July 9, 2009 8:01 PM | Reply | Permalink
Keep in mind that Income Tax is not mutually exclusive from owning Wealth in this country. If you make more money you pay more dollars in tax. I expect to see this trend continue first-hand, as I claw my way towards my first Billion, someday, preferably before I die.
In the meantime...
The wealthiest 10 percent of Americans own 85 percent of Stocks in the U.S.
The top 5 percent own 60 percent of the wealth in the United States.
This obviously doesn't cover the entire range of the Top 50, but I hope it adds some perspective.
July 9, 2009 8:59 PM | Reply | Permalink
I'm soooo tired of this canard. Why is the discussion limited to income taxes? What about other taxes? 80% of workers pay more in payroll taxes than they do in income taxes. Factor in other regressive taxes and you find that the percentage of the tax bite is pretty even across all income levels.
July 9, 2009 10:55 PM | Reply | Permalink
"...you find that the percentage of the tax bite is pretty even across all income levels."
Might be true; I haven't looked at that aspect of recent history.
I've been a little too involved in looking at historic trends and precedents. You know, like:
These things, all combined, came together to create a middle class that could afford to retire (of course, that generation had company pension plans that have evaporated), buy motor homes to tool around during their retirements and on and on...
I agree. Too much focus exclusively on taxes. Maybe the wrong kind of focus, but too much attention nonetheless.
There is not enough attention paid to things like the repeal of the Glass-Steagall Act of 1933 that was pulled apart under (drum roll please) Clinton, that undid 50 years of freedom from the 10-15 year cycle of economic booms/busts that dominated the US economy from the time of its founding to the (previous) biggest bust of all, the GD. Such actions as Glass-Steagall's safety net being removed, combined with all the other Free Market initiatives resulting from the revolutionary Reaganomics trickle-down thinking dominating our economy for the past 30 years leaves us where we are now.
What shall we call these times? The Greatest Depression? Why not.
Of course, we haven't yet hit the 20-25% unemployment rates seen in the first GD...yet...but I believe Mr. Reich is correct. As happened following the New Deal and WWII (temporary) industry nationalizing, we had a new economy afterward.
That is, until we were restored to the free market model that allowed the first GD to happen. Gee. It happened again. Who'd a'thunk it?
July 10, 2009 8:01 AM | Reply | Permalink
Yes. And it's obvious. If for no other reason than heavy concentration of wealth hurts businesses, tremendously.
A million people with the disposable income to buy cars, TVs, washer dryers, books, food, etc. etc. is a hell of a lot better for manufacturers and retail stores than 1000 people with that ability.
The economy does best as a whole when the potential pool of consumers grows. The more, the merrier.
And that's not even dealing with all of the social issues that come about with the high level of inequality, the health issues, etc.
We have a pyramid with the top surging ahead faster than the foundation. It's the wrong shape.
July 9, 2009 9:49 PM | Reply | Permalink
When things get really bad, I'm afraid we'll just have to start eating the rich.
July 9, 2009 7:23 PM | Reply | Permalink
Great idea - we can use the torches to start the BBQ
July 9, 2009 7:28 PM | Reply | Permalink
We can use all these stock options as fuel for the grill.
July 9, 2009 8:28 PM | Reply | Permalink
I'm on a low-fat diet. Besides, I bet they taste terrible!
July 9, 2009 8:52 PM | Reply | Permalink
Me likey!. The new white meat. Look at all the cheap Foie Gras we could get.
July 9, 2009 7:48 PM | Reply | Permalink
It'll never happen.
The rich didn't get that way by being stupid or compassionate. They can see as well as anyone that our population as well as our economy is unsustainable. If things start to look really bad it'll have to be reduced quickly.
The best way would be a fast acting, invariably deadly epidemic with no nature antidote. Probably such a thing already exists and quite a few very smart people are working on refining and controlling it.
July 9, 2009 9:10 PM | Reply | Permalink
The thing is, though, rich people are still human and as vulnerable to disease as the rest of us. An epidemic of disease with no known cure would hit them, too, just as plague and smallpox and cholera and tuberculosis have done in the past.
July 10, 2009 1:04 AM | Reply | Permalink
That's the thing about a man-made toxin. You can create an antidote at the same time.
July 10, 2009 8:41 AM | Reply | Permalink
Sounds like one damn good idea!
July 10, 2009 11:03 AM | Reply | Permalink
Only if you put them in a cage and feed them on milk and bread for a couple of weeks first. Otherwise, they taste too greasy and gamy.
July 10, 2009 9:12 PM | Reply | Permalink
Historically, this was the ultimate judgment required to be made by FDR. Is a democratic system of government and society viable when economic activity and unemployment reached the depths experienced in the early days of his administration. The Republicans were willing to accept things as they were, refusing to countenance government involvement in the economy. FDR made the judgment that maintaining the status quo was unacceptable which began his new deal programs which didn't reach full employment until WW2 and the post war boom.
Although Obama has recognized the need for government action, and spurred it, he has been satisfied with letting the centrist Democrats water down the necessary action, even in the face of responsible economic opinions (see, Krugman) that the stimulus investment is far to skimpy to fill the hole in the economy.
What economic model is based, not on confident consumers, but frugal ones who have just had the bejesus scared out of them by falling home values, diminished retirement accounts, health care increases as far as the eye can see (without a likelihood that Congress will be able to craft anything workable in this latest healthcare legislative effort), little job security, and what remaining income exists being bled off by bank credit card scams which will put a vast majority of "middle class" consumers in hock to this loan sharking activity for years to come.
This is a generational thing. It is not a short term correction. Our grandchildren will be hearing our stories of survival from economic greed and chains forged from credit card debt owed to the bank that will take years to be free from. This is not the word of mouth that builds a society of confident consumers, either in this generation or the next.
I think Mr Reich is correct; there is no knowing what will be the shape of the economy resulting from this depression. One major question is whether Obama and the Democrats running the government will simply leave the resolution of this to chance, letting the chips fall where they may (here I mean the very real prospect of civil unrest from desperate, once middle class families), or whether they will find that risk too great and intervene heavily to force the creation of an economy designed to address personal needs and preserve our historical democracy and societal forms and values.
President Obama's time has arrived to make a judgment on the eternal question that FDR was forced to confront.
July 9, 2009 7:44 PM | Reply | Permalink
I fear L could be what we're looking at.
Reich is correct when he says we can't get back on track because the track we were on is unsustainable - it consisted of borrowing against inflated asset value.
He is also correct in saying consumers won't start spending until they have money in their pockets and feel reasonably secure. But they don't have the money, and it's hard to see where it will come from.
In fact, the automobile industry and the manufacture of (most of) the other goods citizens used in their day-to-day lives is what put money in consumers' pockets and allowed them to feel reasonably secure. (See: The Henry Ford/labor movement dicta of paying workers enough to buy the goods they produced, and giving them enough leisure time (nights,weekends and vacation) to want to purchase and use the products they produced.)
Unfortunately, such jobs are no longer available to Americans as they have been outsourced to cheap overseas labor markets.
Equally if not more distressing is the fact that we have also lost the technological know-how, the manufacturing supply chain and the production capacity required to develop the "new economy" (green economy, I assume) AND provide jobs in sufficient numbers by producing the hardware associated with this new economy.
For despite what the "best and the brightest" say, Dr. Reich included, 'symbolic-analytic' jobs alone will not save us from the L - there aren't enough of those jobs, and not everyone is suited to such work.
People cannot live by symbolic-analytic alone. The classic mural teaches 'Talents Diversified Find Vent in Myriad Forms'
http://en.wikipedia.org/wiki/File:Buffalocityhall-dodgemural2.jpg
The bean counters and academics failed to learn that lesson. Instead of myriad forms, they expect everyone to fit the 'symbolic-analyst' mold.
Nature does not conform to their theory, so we can expect those Americans with a myriad of talents who also do not conform to be jobless in the brave new world.
July 9, 2009 7:45 PM | Reply | Permalink
There's gloom unless we invent our way out of this. Will we do that? Most likely. On what timeline? Nobody knows. But there are brilliant people working on brilliant possibilities, even in the failed state of California, from where Prof. Reich sees his partial view.
The crucial thing is getting the old industries out of the way. We've done well with autos. What's next to deconstruct? The news business is also well into deconstruction. So is the music business. All this is very positive.
July 9, 2009 7:51 PM | Reply | Permalink
This sounds nice and it is what is needed but....one needs to feel secure enough to take the risks to be inventive and innovative. You also need the time and resources necessary. Nowadays it is just to expensive to do this because it's too expensive to just make it.
People are taking part time jobs for health coverage and to pay the bills. With an economy like this, no one can afford to be inventive.
C
July 9, 2009 8:25 PM | Reply | Permalink
"With an economy like this, no one can afford to be inventive."
Well said.
The lack of innovation is the flame that is sucking the oxygen out of the room - not Obama's policies.
July 9, 2009 8:31 PM | Reply | Permalink
Well, the policies aren't all that innovative either, so that has a little bit to do with it.
We needed bold and daring but got cautious and plodding instead. It remains to be seen if Obama can go around Congress in a flanking maneuver designed to enlist the aid of the silent majority. He is still letting the fringes define the center while courting "moderates" who are anything but when they advocate for the status quo.
I have fairly unimpressed with the implementation phase of the change Obama campaigned on. Sure, it's still early but the trends are becoming pretty clear.
July 10, 2009 9:53 AM | Reply | Permalink
I hate that I have to agree with you.
July 10, 2009 11:56 AM | Reply | Permalink
I think the root of the problem is that we do not have a free labor market.
If labor were able to truly move freely about the country, (which I believe is unique to American capitalism)
Too many people are "stuck" in their jobs, by "stuck" I mean they can't sell their house in order to move somewhere else with more opportunity. This has been one of my arguments AGAINST home ownership, especially for someone in their 20's whose career might just be developing.
They are also held hostage by the employer provided benefits, which vary so much from company to company even the smallest detail in healthcare coverage can disproportionately affect someone's job decisions.
Free Market Capitalism sounds so alluring, like some financial moral Valhalla. At the end of the day money is a tool, not some philosophical concept.
July 9, 2009 7:53 PM | Reply | Permalink
Moving somewhere else for greater opportunity is not all it's cracked up to be anyway when you consider the cost to families and communities. Are Americans even marginally better off than Europeans when you include quality of life factors?
We need to figure our some kind of neo-protectionism that nurtures jobs close to home. Maybe we have to start thinking small again. Small town. Small farm. Small business. The small businessman may be conservative but he may also care quite a bit about using his money to help his own community. In fact I know quite a few Republicans like that who I'd trust more than some of these free trading Democrats.
July 9, 2009 8:10 PM | Reply | Permalink
I think we are totally missing out on the fabulous gifts that the information age has brought us.
There is little reason for many people to move for "work" anymore.
If most of our work product is our ideas - what is up with the costly office buildings etc. other than to intimidate/impress competitors?
Some friends and I think that hospital/testing care should be completely socialized. General Practice care should be the hybrid portion.
A market of innovative healthcare providers (like house calls) would immediately crop up and find plenty of people to pay for - and be happy to pay - because the big unknowns in their care are already covered.
July 9, 2009 8:29 PM | Reply | Permalink
Finally some integrity around here.
And I appreciate your questioning of what a recovery will look like.
Because anyone that says they do can immediately be dismissed as a fraud.
Theres no doubt Obama failed to protect homeowners from losing their homes while caving in to the banks and making this depression much worse.
And while one must be very cautious with polling it appears the support for Obama is fading as people see things are getting much worse in their lives while the rich thrive with wall street bailouts.
Nothing good will come of this and with no jobs and no recovery its hard to see any politician will ever gain the trust of the people .
Maybe that will be one good thing to come of all this.
Obama had a chance to be great by pushing programs with the dem congress that could have taking back the country from what bush destroyed.
His support would have crushed his critics and left them on the sidelines for generations.
Instead he chose more war , the most massive exchange of wealth in history and a continuation of most of the bush policies starting with telecoms immunity all the way to stacking key positions with wall street and corporate hacks.
I was an early critic and now more are waking up.
Take your best shots people as I expect the usual suspects but pretending wont change the fact that Obama will never regain the support he enjoys now after he losses it.
July 9, 2009 8:00 PM | Reply | Permalink
"Obama failed to protect homeowners"
From who? Themselves?
They were already circling the drain long before Obama had anything to do with it.
The bursting of the real estate bubble was in the works LONG before Obama took that stage at the 2004 Democratic Convention.
People equated home ownership with success, it is as simple as that.
I own a baseball bat, doesn't make me a home run hitter.
July 9, 2009 8:09 PM | Reply | Permalink
An awful lot of homeowners have ended up in trouble through no fault of their own. A tidal wave swamps all boats, you might say.
And here's the thing: 15 or 20 years ago, when a home borrower ran into trouble, it was possible to go to the lender and work out a modification of terms. It benefitted both parties: the borrower got to keep his home, the lender was spared the cost of a foreclosure.
Because of the way the mortgage business has been so heavily securitized, though, that's no longer possible in most cases. It's next to impossible to trace who actually owns any given mortgage loan these days, and even if you could do it, there are likely to be so many parties involved that it's not possible to negotiate any sort of terms for a single borrower. And so when the properties go into foreclosure, everybody loses.
July 10, 2009 1:18 AM | Reply | Permalink
I can't decide if we're going to turn out like the Roman Empire or the British Empire. Roman, I'm afraid.
July 9, 2009 8:14 PM | Reply | Permalink
I think it will be a uniquely American failure.
We are only a 200 yr old nation - historically speaking - we have no standing to claim our system(s) are better than any other.
July 9, 2009 8:23 PM | Reply | Permalink
Glad you found the will to punctuate.
July 10, 2009 11:57 AM | Reply | Permalink
Seconded. Capital letters are nice too.
July 10, 2009 12:07 PM | Reply | Permalink
Re: What we need is a free labor market.
Can it be stated with a straight face that there are jobs out there begging to be taken, and no one will because the terms aren't right?
It doesn't seem convincing to me to argue that our current depression can be solved if some of those 10.5% of Americans who are currently unemployed would simply move to some job that is waiting for them. Don't you need the jobs first?
July 9, 2009 8:01 PM | Reply | Permalink
My point was that if labor moved more freely industry would respond.
But that's just my theory, as good as any else at this point eh?
July 9, 2009 8:05 PM | Reply | Permalink
My childhood was spent in the 30's to early 50's, living in a small town, where no one had very much. My family never once had an automobile, for example, and my parents never took a single vacation until long after I graduated from college. But, we had a very good lifestyle, a very enjoyable life, and, to my knowledge no one felt like they were in poverty.
I say all of that, because I believe we are headed back to that standard. For example, today if you look at new housing, it is at least twice the size of any housing where I grew up, and more like 4 times that size. That is utterly unnecessary. People think SUVs are essential, so they can tow their boat, and drive on long vacation trips. That too is totally unnecessary. We "need" new computers about every 3-4 years. That too is unnecessary. I could go on and on and bore you to death.
A nation living lives of lowered expectations is what I see in the future. But, a nation of people just as happy and fulfilled as today, if not more so.
July 9, 2009 8:49 PM | Reply | Permalink
I grew up in the 60's Hoppy, in small towns too, and found the very same phenomenon to be true. It is glaringly obvious that much of what is today considered essential is actually not only unnecessary but a distraction from the important things in life. The ubiquity of television in it's various forms is the worst of all these things in my opinion. We were much better off with three networks and one independent channel in most communities, all of which signed off around midnight. It was not at all unusual when tv was limited in nature, for people to regularly find other things to do instead of sit in front of that tube. There is much we can do to help ourselves that is in essence, simply deciding to reject much of the materialism that is foisted upon us by corporate culture.
July 9, 2009 9:52 PM | Reply | Permalink
Oh absolutely. I grew up in the 50s and 60s in North Easter Ohio. We had a TV. A used one that my father would get. If it broke it was either repaired of replaced win another used one. My parents watch TV more than I or my siblings did. I would watch cartoons on Saturday mornings or maybe an evening kiddies show.
But I was lucky. We owned 3 acres of land most of which was wooded. Not only that it was a small part of a large wooded area and as kids we would go all through it. Nobody cared. No fences or No Trespassing signs.
Spent most of the summer in the woods. Winter indoors playing.
For two weeks in the summer the family would go camping across Pa. to visit my Grand parents.
We had the County Fair.
Just did not need much to keep entertained.
C
July 9, 2009 10:28 PM | Reply | Permalink
Hoppy makes a good general point -- that it is trivial to get by with "less", because the jettisoned stuff isn't essential. However, we shouldn't go overboard:
This simply isn't true. It's equivalent to saying that we would be better off without the info revolution. 3 networks concentrated far too much power into too few hands. As it stands now, there is already too much concentration of media in too few hands, but what you are saying is the equivalent as to things would be better if there were only a dozen destination sites on the Internet.
You go on:
This is an already fading argument: more younger people sit in front of the computer (e.g. Internet) than TV.
All do respect, seems that pining for days of yore as "simpler" without some deeper thought is quite dangerous. Much of the sophistication in society today (race, gender, orientation) is precisely because of the explosion of information and it's homogenizing effects on society. There's a reason why gay are allowed to marry in Iowa -- it's because of the myriad of outlets available to express and test opinions allowing the extreme to become the norm.
July 10, 2009 1:09 AM | Reply | Permalink
"This simply isn't true."
You are off base in this comment. It is a matter of opinion and mine differs with yours. It isn't a question that is either true or untrue. I believe we were much better off. You don't. It's a disagreement.
July 10, 2009 11:02 AM | Reply | Permalink
You can believe what you want, but it's antithetical to previous statements made by you (I believe) extolling the wonderfulness of the Internet and information availability and how it gets around strict corporate control. But maybe I'm mis-attributing the remarks.
On the whole, I know no one, except you, who wishes to restrict the number of info channels available.
July 10, 2009 1:04 PM | Reply | Permalink
actually not only unnecessary but a distraction from the important things in life.
Right. Not only that, but fouling the nest in a big way (in other words, killing the planet, or at the very least, altering the biosphere in such a way as to become incapable of supporting human life as we've known it.)
The people who have been planting seeds (literally) for the last 20 years may now hold many of the answers if we are to survive at all -- the locavores, the permaculturists, etc. Smaller scale everything. Drastically reduced consumption. Local community. More walking. Producing our own culture again rather than consuming what the corporations feed us.
July 10, 2009 1:13 AM | Reply | Permalink
And we'll probably live longer as well.
C
July 10, 2009 11:02 AM | Reply | Permalink
I grew up in the 50's and 60's. My dad was in the Air Force when I was born and used the GI Bill when he got out to buy a house. He worked in an auto parts store and my mom stayed home and took care of us kids. We had very little, but we were happy kids...a little neglected by today's standards, but hey, times were different then.
The truth of the matter is, the world standard of living is in the process of leveling out. Ours is going to go down, and much of the rest of the world is going to see theirs rise. I don't see this as being such a terrible thing.
We are so terribly materialistic as a country. We just don't NEED all this crap we have, houses big enough to store it all in, and storage units for the stuff that still won't fit. What's wrong with renting a boat or an r.v. from time to time instead of having your own? Does each child NEED their own room, plus a family room, plus an office AND a play room? Do we really NEED 14 different magazines about who's doin' who and what's going to happen in the next 30 episodes of as the stomach turns?
Jeez, everyone is crying about how terrible things are going to be. We just need to take a chill pill and work on figuring out what is important, what we actually NEED rather than what we want. Can't we just pool our money, get a health care safety net under everyone, then figure out where to go from here?
The new economy IS going to look different when it is based on something other than a bunch of crap we don't need...Haven't the faintest idea what it's going to be, but it has to better than going to hell in a hand basket, which is what we've been doing lately.
July 10, 2009 12:32 AM | Reply | Permalink
Most everyone's standard of living will drop.
It's because our entire global and individual national economies is predicated on cheap energy. This is about to end.
Indeed without that cheap energy, we can't even sustain our present population rates.
Therefore we are all due for quite a tumble. And mores and attitudes of days of yore will follow. Expect much of the liberalism -- which was driven by the industrial revolution