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This is a bad one. We've spent 25 years shipping American jobs to third world countries. Those jobs and industries won't be coming back.
During those 25 years the credit/consumer economy has arisen. In this type of economy money is made by selling stuff to people who can't afford it and who use equity and credit/debt to pay for these things. Kind of a giant pyramid scheme.
Also during those 25 years wages have been stagnant, pensions have been eliminated, and health care costs have skyrocketed. The cheap energy which built the post WW2 US economy has disappeared.
I would say that America has never been in quite this pickle before. I wouldn't call this a 6 month downturn, this is a whole new downward direction. 21st century America is not in good shape at all.
This is a bad one. We've spent 25 years shipping American jobs to third world countries. Those jobs and industries won't be coming back.
During those 25 years the credit/consumer economy has arisen. In this type of economy money is made by selling stuff to people who can't afford it and who use equity and credit/debt to pay for these things. Kind of a giant pyramid scheme.
Also during those 25 years wages have been stagnant, pensions have been eliminated, and health care costs have skyrocketed. The cheap energy which built the post WW2 US economy has disappeared.
I would say that America has never been in quite this pickle before. I wouldn't call this a 6 month downturn, this is a whole new downward direction. 21st century America is not in good shape at all.
'if there's no recession, someone forgot to tell the labour market'
Quote:
Originally Posted by elgusano
A recession is two or more consecutive quarters of economic downturn.
We have not even had one quarter of economic downturn.
We have not had a recession since 2000-2001, and that was a mild one.
However, if the media keeps crying it out long enough, it might happen.
I apologize for using the term inaccurately, maybe we should go by the phrase job/cost-of-living recession. However this author is not to quick to apologize. She says: "Forget the technical definition. The United States has the look and feel of a country in recession as job losses, high gas prices, tumbling home values, tight credit and a stock market rout bite ordinary Americans."
I agree with the author in this article that recessions can be measured by job loss. For example, Starbucks may increase its profit to the shareholders by laying off the 12,000 employees and closing the 600 (estimate) stores, but those are lost jobs.
"The unemployment rate held steady at a four-year high of 5 per cent. And the job losses cut across just about every sector of the economy, from banking and retailing to manufacturing and construction. The only sectors to escape carnage were government, health care, education and leisure."
Do you disagree with her opinion too?
reportonbusiness.com: But is it a recession? (http://www.theglobeandmail.com/servlet/story/LAC.20080704.RUSJOBS04/TPStory/Business - broken link)
I've only seen 30 years of American economic cycles, so I may be underinformed. However, the combination of 1) fewer jobs and 2) more expensive everything equals hard times. Housing has doubled in the last ten years, and fuels have tripled. Doesn't matter what you call it or how it is measured by the government. CPI is a joke with no bearing on middle-class and especially lower-class America.
Nobody is better qualified to judge the economy than real people in the trenches, working more and bringing home less buying power than before. The Federal Reserve's toys are broken, and this recession will be deep and long. The reasons are obvious to those who learn about it, so I will not list them.
As for me, I have a resume into Waste Management. I'm not an international banker, so I am just trying to survive.
Regarding the post before mine, the rules for calculating unemployment have been played with beyond reason, just as the CPI. They are not reliable or even valid factors to judge money with.
5% unemployment is not very high in the grand scheme of things.
And, what we are suffering right now is stagflation, which roughly defined is a period of inflation tied with a slow rate of economic growth. (Specifically, it's either high inflation, which we do not have right now, or high inflation in certain areas, such as gas.)
Couple this with an artificial housing bubble that a lot of people gambled on (similar to the dot com bubble of the 90s) and there are a few people in trouble. Most people simply have to tighten their belts and ride it out until it corrects itself.
One reason you don't see a lot of mainstream media types talk about stagflation is that Keynesian economics says that it can't exist. And although Keynesian economics has been completely debunked for many years, it is the darling economic dreamlist for those who espouse Marxist and socialist ideals, which is rampant among those in the media and in politics.
I appreciate your opinion. It was interesting to read your perspective. The main goal of this thread is to get advice on how to live during this type of period.
For example, I am looking for a job. However, many other American's are looking for a job, and that means that I may be unemployed with no money in about 6 months. Therefore, the advice to "tighten your belt" won't help me.
That is why I am wonder, how did people survive these depressions in the past. I know there is a way not to end up bankrupt or homeless.
A friend of mine is an engineer. He lost his job when it was phased out.
My advice (as well as his) is to get by until you can improve your situation.
He worked at Best Buy for about a year while applying for other positions.
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'if there's no recession, someone forgot to tell the labour market'
