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Watching the big business interests in the U.S. deprive workers of living wages is increasingly astonishing. Of course, without them, business has no consumer. The major industry in the country is the consumer economy. Eating their own tail would teach most creatures, but not so far the U.S. Chamber of Commerce and its many components.
That the financial interests are doing the same shouldn’t astonish us, but it never fails to amaze. The failure to acknowledge that that property is worth considerably less, has been an obsession with financial giants.
Last night on PBS’ Need To Know, Dr. Warren laid out the dangers that are involved.
While depriving the consumer of the ability to work out the terms under which they could actually handle their mortgages under present day circumstances, the financial industry is counting on returning confidence to prompt a return to prosperity. This is not going to work. When business accepts reality and deals in the reduced circumstances it has created, the country will begin to return to sanity. Until the necessary component of our business community, the consumer, returns to prosperity, the country is not going to regain what it threw away.
What is on your mind tonight?
7 Comments
It was colossally stupid to kill the goose that laid the golden eggs.
Agreed. It will be some time before businesses have the consumers they need for prosperity to return.
Confidence will not return because people don’t believe the system is fair. We don’t put confidence in things we don’t trust and we don’t trust things that are unfair. Am I missing something?
Good luck explaining to your kids that you can’t feed them because it would be unfair. Or to your lender/credit card holder that you’ll pay them when you trust them.
Not sure I follow you, but I won’t have to explain either of those things.
Buying? Buying what? Consumerism is a dumb thing to begin with and we need to buy less. What we do need for living needs to be affordable – clothing, food, transport, housing and related, health care, and I suppose communications.
But we grew up believing we are what we own and so most Americans got into the accumulation and buying frenzy and measured their success in life by how many things they have.
Many corporations which participated in the driving down of wages are not producing consumer products directly, but might be producing chemicals or components which eventually become consumer (or industrial products). Corporations of all sorts are there only to make profits and money and clearly driving down the cost of production is one means to do this and that what they do. When their products got too expensive, the colluded with the finance sector to “sell credit” (another profit scheme) so that consumers could buy things they could not afford. And as long as money was flowing regularly owing a chunk seemed not to be a problem and we became a debt based society. Almost everything is financed or purchased with debt and paid for over time with interest. All fine and dandy as long as the debtor has a revenue stream to pay his creditors. Once there is a “call” on the debt, it reverberates up and down the system and anyone and everyone takes a hit. Corporations tighten their belts and lay off workers or move to low wage markets (or raise prices). Banks shrink credit and demand more cash on their debts. Defaults continue and the system slowly unwinds as it can only work with debt and people and corporations with sufficient cash flow to service the debt. When there is a retractions it takes everything down a notch in a death spiral.
Being addicted to a credit based economy on every level many are calling for deficit spending which will inject money in the system and it will go on again. For awhile. Capitalism and a debt based economy driven by corporations whose sole function is to make profit will sooner or later return us to the same type of crisis we are now in.
Keeping a debt based system going by taxing profits and wealth is a bandaid, but perhaps can be managed more than the unregulated free market approach which capital has all the high cards in their hand.
We need to look for a different paradigm to structure our economic life. But we won’t get to that if we save this system, This system needs to crash and burn and another one stood up. The transition should be as painless as possible, but it’s hard to imagine this without lots of pain and especially the capitalists throwing major fits as they realize the party’s over. They won’t like that and will play nasty to make than not happen.
Cha-Ching!