Today, global stocks sit at their lowest point in 15 months. In Europe, the markets are "in meltdown," as traders flee in fear of a Greek default that would devastate the continent's financial stability. The world's economy is stuck in a race car with a brick on the accelerator chugging full speed towards a ramp overhanging the tempting lip of the double dip recession. I think we can make it! Faster, faster, whee!
Once Europe falls, we won't be far behind. Here in America, the high times are over. Consumers have cut back their spending to pauper-like levels, never to return to their profligate ways of only a few years ago. Joseph Stiglitz points out that even if consumers were to start spending again, they could never spend at pre-recession levels, because pre-recession spending was running at about 110% of annual income; "So anyone who talks about the consumer 'coming back'-even after deleveraging-is living in a fantasy world."
You, the consumer, are finished. Never to return. The good old days are over. Your lack of spending is both driven by and creates high unemployment. On top of that, the middle class dream for those without college educations is dead. Where did you think you would find a middle class income, fantasy boy? Manufacturing jobs are drying up everywhere. The unemployed don't have the skills to land the jobs that are available.
Without consumer demand, the only mechanism left to save us is government spending. Unfortunately, self-proclaimed "fiscal conservatives" with little grasp of math have picked this, of all times, to embrace government spending cuts. Instead of spending now to give jobs to the desperate unemployed masses, the only acceptable forms of government handouts in Washington are tax breaks and subsidies for the
job-creating class. Instead of being spent, which would actually help our economy, this money will be deposited in a bank, where it will sit, because the people getting this money already have money. And Stiglitz, again, notes the obvious: "Shifting income from those who would spend it to those who won't lowers aggregate demand."
In short, it's not looking good. For you, we mean. Not for corporate CEOs. They're on a financial rocket ship to the moon. And that's what America is all about: rewarding the top 1%. It keeps everyone else motivated. Good for morale. We don't want to punish success. If you're not in the top 1%? Well, this is the land of the free. It's probably your own damn fault.
[Photo: David Shankbone/ Flickr]