Wednesday, March 08, 2006

From The People Who Brought You Ketchup as a Vegetable

I keep hearing from pundits and politicians about how wonderful the economy is doing. And I look around me, and I often wonder, what planet are these guys on. The I remember that it's hard to see well when you spend all day in an Ivory Tower. And being well paid, they don't see how terrible things are really going. In all probability, they never visit anywhere near where I live, but from what I see, things here are deteriorating rapidly.
At the First of the year, food banks reported over 25 million people customers. Now I doubt that these are just people being thrifty as some might think, but points to a real problem in this country-people can't afford food. Why can't they afford food in this robust economy? Because there is no robust economy, just some more of the type of accounting Enron used to raise stock prices used to mask reality.
Right now, the government is a on a spending spree. It just can't stop spending money it doesn't have. They're are just about to bump their heads on the $8.2 trillion debt limit and are tapping civil service pensions to cover the gap. Of course, the rubber stamp Congress will raise the ceiling more, leaving one wondering how they can call this fiscal responsibility.
Another problem the government has turned a blind eye to is employment. Or rather, unemployment. The current rose colored rate is at 8%, which is based on numbers derived from people drawing unemployment. What it completely ignores is the 5 million people who are chronically unemployed, that is, those who have been unable to find gainful employment beyond their benefit period. Not to mention the under employed, who subside on part time positions or wages that don't meet inflation. With rising gas prices the cost of everything has risen as well while Congress still refuses to raise the minimum wage above $5.25 an hour.
Now we're supposed to believe that the government is creating new jobs. That is what was supposed to happen with the passage of NAFTA and CAFTA. The reality is, they just haven't happened. Recently when WalMart opened a store in Illinois, 25,000 people stood in line for 300 available jobs. WalMart would like to think because it's such a great place to work, but a job that offers no benefits is not a great job. 25, 000 people stood in lines for hours because they want to work!
There's a house I pass everyday on my way to work, beautiful house, brick ranch with an attached garage, right next to a church, yet the house has been on the market for over two years. It hasn't sold, not because mortgage rates aren't low enough, mortgage companies advertise all over about how low rates are, but because rates are so low, for ten grand or so more, you can buy a new house. But now, even new houses aren't selling, as the Commerce Department said there's a glut of unsold new houses on the market, with sales sliding steadily as much as 5%. Now if you live in an area where there's a lot of available jobs, selling your house wouldn't be a problem, but if you don't, housing values are expected to fall as much as ten percent in a dozen major markets. So those people who refinanced their house at the old boom price, could end up losing money when it comes time to sell their house. And new housing starts have been the main barometer of the manufacturing economy.
Speaking of the manufacturing economy, the current administration likes to boast about how it created new manufacturing jobs. When they say this you must remember that these are the same group of people in the Eighties who tried to get ketchup classified as a vegetable in school lunch programs. How did they "create" these new manufacturing jobs? They merely reclassified a job making burgers at McDonald's as a manufacturing job.
Unfortunately, a job "manufacturing" burgers at McDonald's doesn't pay you enough to buy a new house.


Granny said...

Rent keeps going up here as the economy goes down. We're turning into a bedroom community for San Jose (and even San Francisco for people silly enough to drive 135 miles each way) so housing prices are through the roof.

I know Michigan is having severe problems but I don't know a lot about Grand Rapids except for the furniture. How are you doing back there?

Lew Scannon said...

I work at an office furniture manufacturer for a contract company, and they keep closing plants and moving the work south. Meanwhile, the suburbs have spread west almost to Lake Michigan. There's a new manufacturing plant coming soon, but I'm not too sure what it is.

Peacechick Mary said...

New house! They can't even afford a rented dumpster to live in and Bush says our economy is strong - for the rich that is.

Neil Shakespeare said...

I believe the grand conspiracy is to turn all the poor into vegetarians by opressing them to the point that the only food they can afford is ketchup. Well, that and ketchup soup.

Left of Center said...

Also, other nations arent buying our debt as they have in the past, and countries are going of the dollar as the base fore their ptrol's a house of cards, it certainly is starting to collaps.

Kathy said...

Lew, you're right about the jobs moving south, but I have friends who moved from Michigan to S. Carolina who tell me conditions there are just as bad.

There is a big discussion going on in their community between the skilled trade workers and day workers. People spend money to go to trade school and get certified, yet employers pick up day workers off the street every morning to hang drywall, do plumbing, etc., for cash under the table. They can't begin to compete.

It's a race to the bottom for the middle class. We will become a two-class country at this rate.

Kathleen Callon said...

Today's news said unemployment just "unexpectedly jumped". Most Americans are making less than they used to as well. Having a King Robber Baron passing laws and tax cuts to help all his Robber Baron friends is going to bring on another depression. Here, in Southern California, only 11% of the poeple can afford to buy a home, yet the market still seems hot, which doesn't make sense unless you concider the top 11% may be snatching everything up?

Anonymous said...

Sorry to focus on a single thing...but if you saw the new construction cr*p that they're trying to pawn off on hapless buyers here in Babylon by the Bay, you'd be convinced that there is no bubble. Sales of existing homes are still at record levels.

Lew Scannon said...

Well, not all markets are affected. desirability is a key factor, as well as availability of jobs. everybody wants to move to the coast.


Thankfully I am selling now- seems like the time was right for major life renovation after all! Ketchup Cocktails, here I come!

Ron Nasty said...

Mix a little Heinz with some vodka and you've got one hell of a bloody mary smoothy

Earl Bockenfeld said...

My Bush Boom's "Oh Shit" moment

Productivity in the US declined by half a percentage point in the fourth quarter of 2005, the first such decline in five years.

U.S. nonfarm business productivity fell at a 0.5 percent annual rate in the fourth quarter, a smaller drop than first thought but still the first decline in nearly five years, a government report showed on Tuesday.

Wall Street had expected productivity to be revised to a 0.1 percent decrease from the originally reported 0.6 percent drop after an upward revision to fourth-quarter gross domestic product growth.


For 2005 as a whole, productivity grew 2.9 percent, the smallest increase since 2.4 percent growth in 2001 and slowing from a 3.4 percent increase in 2004.

So that mean's its not possible for American Business to squeeze any more uncompensated overtime out of the American working class.

At some point, one would expect workers to stop being so productive when they're not being compensated for it. Maybe we're there.

Wadena said...

Luckily, they're also the same people who spelled potato with an e.

They'll crash and burn.

Lily said...

Ron always makes me laugh, I swear.

Leslie said...

Hi Lew,
I've listed you on my blog, along with Crest of the Empire, Lose the Noose, and LOC.

Lew Scannon said...

Hey! thank you very much! And those are three of my favorites as well!

Granny said...

Thanks lew.