“recovery? we’re being conned”
I wrote those words on August 31, 2009- it speaks for itself – the economy never made it and the signs are completely there: we’ve got to get local and small as fast as we can…here’s the rest of the post:
Consumerism accounts for at least 2/3rds of the U.S. economy. For our economy to bounce back then, we need for that 2/3rds to return to previous levels of spending. And then obviously for the economy to grow, spending among that 2/3rds needs to increase.
Is it just me: how on earth is this going to happen? How will we ever return to previous levels of spending let alone grow it?
Wages are in a downward spiral due to both the short term effects of rising unemployment as well as the long term effects of globalism. We’re using the wages we do make for saving and debt reduction. Consumer credit has hit the wall; default rates on credit cards are rising to record levels as credit limits among even low risk borrowers are slashed. More than 1/3 of all mortgaged homes are underwater, which combined with rising foreclosures are slamming home equity for everyone else.
Thus the big three ways that we fed our consumer lifestyle – wages, credit, and equity – are gone.
Add to this rising taxes and fees, increasing health care costs, chronically high gas prices and fear of losing a job. Who in their right mind is in a spending mood?
Ok, so this is just temporary, right? Surely soon it will all come back….
How? Wages cannot grow as long as there is high and rising unemployment – and unemployment won’t ease until the consumer economy restarts. See the vicious circle? (Although I do believe that if somehow the economy does restart, that globalism will again exert downward pressure on wages here – which has the same end result.)
Credit cannot grow until people are credit worthy again, with rising wages and increased net worth. Vicious circle again.
Home equity cannot grow until demand returns, which needs rising wages and an improved credit environment. None of that can happen until the consumer economy restarts. Vicious circle again.
So basically what needs to happen is that somehow people start spending again in spite of all this. If we start spending again then maybe, just maybe, we can jumpstart this thing, get the motor roaring, and when we do, THEN we can get the rest of it all back together.
What will it take to get this jumpstart going? Why good news of course, “green shoots.” That’s why the mood in the mainstream media has been nearly euphoric: we just witnessed the largest stock market run up in nearly 75 years. Surely that is proof that things are getting better.
But what is the mainstream media but something to be consumed, supported by the advertising of things to be consumed. Thus, consumerism itself is saying that consumerism is back.
My belief is that we’re being conned with all the “good news.” The reality is as described above: the consumer economy is at best in a deep coma and, at worst, dead. That means that 2/3rds of our entire economy is missing in action. What will replace it? What will replace it soon?