Times is hard. A good chunk of the middle class is sliding into poverty. The percentage of families in poverty is at a record high. The unemployment rate is officially below 10 percent (wink, wink) but the actual rate is probably more like 15 to 18 percent because job seekers are demoralized and have stopped looking and are too busy moving out of their foreclosed homes. We have been in "recovery" for well over a year and there are not many signs that the economy has a pulse. People on the right are quick to criticize the government's stimulus efforts but I shudder to think where we would be without them. We have had serious recessions before and no one wants to use the "D" word but I would not be surprised if future economists and historians claim that we are in a depression.
There are a few things that make this "downturn" different from others. Big employers have sent thousands of jobs overseas and those jobs are lost...unless you want to move to India or Malaysia. That has been happening for a while and people have been wringing their hands but not much has been done to counter the trend. The difference this time around might be that we no longer have relevant labor unions. I understand the criticism of labor unions but they would have had a voice in the crippling flow of jobs overseas and the elimination of the middle range jobs that have been lost. This economic slump has destroyed many of the middle range jobs that had, in previous decades, been under the umbrella of labor union protection.
People complain that a worker should be able to hold a job without belonging to a union and that unions drive up the cost of running a business. In the first instance, labor unions used their collective bargaining rights to benefit all workers and I don't see a real issue with wanting workers to be part of the union. If we had strong unions we would have more people working and more people buying homes, cars and other products...which would benefit the economy.
The other complaint, that unions raise business costs, is interesting. Now that unions have been pretty much weakened by business interests and popular apathy, why don't we see a corresponding reduction in costs and less expensive products? Products or services offered by non-union providers don't seem to be less expensive than union products or services. Many businesses have been banking huge profits during this downturn and do not seem to be letting any of that trickle down toward new products or job creation. This is called a "wait and see" strategy -- basically you get as much as you can get and sit on it because you are waiting to see the other guy spend his first. Labor unions are not saints or angels and have made terrific mistakes...just like businesses...but the basic premise of collective bargaining is still valid.
At this point we seem to be in a loop of some sort. The economy is bad and we have a gloomy outlook for the future. As a result, we have no confidence in our future and take the "wait and see" approach...which keeps the economy in the dumps. We have been in trouble for a long time. "W" Bush squandered a budget surplus, gave huge tax breaks to the rich and then started two wars without a tax increase to support the cost. We have been engaged in a huge wealth redistribution effort for ten years or more taking money from the poor and middle class folks and giving it to the rich. The social security fund is investing in US treasury bonds which are then used for operating expenses so that the rich don't have to pay their fair share of taxes. Revenue doesn't cover expenses so we borrow from the Chinese or other countries to pay our expenses and then have to pay back the loans. Heaven forbid that the rich be asked to pay their share.
So here we sit. The housing industry tanked and then tanked again and still seems too precarious to be heading toward recovery. All the affiliated industries have suffered. We had six lumber yards in our town and they were competing for four building projects...only four building permits were issued in one month...and, of course, the one lumber yard that most recently went through an expansion and upgrade went belly up. Furniture stores are closing...we lost two of them this year. I'm seeing some house renovations going on but no real increase in new homes. Two developers who were pushing upscale homes and "gated communities" went bankrupt. I'm trying to sell my house but the housing market is in a death spiral. I had three people who wanted to buy but they couldn't sell their own houses. Prices are falling way below what I think some houses are worth...I'm surprised to see the asking prices on some houses and it becomes very difficult to compete. Luckily, I don't have to sell but I have plans that are on hold and I'm not getting any younger.
