Will people get back on the merry-go-round?

[SoCalDem]

All the "Money Shows" are trying their best to spark up the interest in the "Market"...the "Street"..the "Futures"..

There are MILLIONS of people who feel poor, and who are frightened out of their skulls over the prospect of losing jobs they never thought THEY would lose.

These people did it all "right". They put money every week into those 401-ks.. they paid their mortgages..they bought cars..

They worked overtime. They paid their student loans..

and then it all crashed...


The house is worth half of what it used to be worth, or maybe what they owe on it.

The job may be gone...or in jeopardy of going.

The 401-k is maybe half-there, and slipping daily.

Even with the stimulus passed, the people who are now employed, will not see more money in their pockets..they MAY have dodged a bullet, and will get to keep the job, but surely there will be no raises on their horizon..and they may still lose benefits they currently have or may be charged more for them.

Fear makes people conservative....not necessarily freeper-conservative, but surely financial-conservative.

Money that used to be spent freely at malls, or restaurants, is held close these days, and even after the immediacy of the crisis passes, I wonder how many people will jump back on the merry-go-round.

There are many people today , who know an elderly person (or maybe they have one in their own family) who hoards food, or saves things, because of what they remember from the depression... These old folks used to be the butts of jokes, because most people under a certain age, have never known true hardship.

The difference today, is that we are not as rural or small-townish as we were then....not as connected as our grandparents and great-grandparents were , back in the '30s. Back then , it was not uncommon for several generations to already be living together...

Young people often did not move out on their own when they married, and many families had gardens to supplement their diets.

People were used to buying used things, and they fixed things, instead of tossing them away and buying new ones.

Most people did not have access to credit, so they may have been dirt poor, but they did not enter poverty , with a pile of debt. People bartered a lot then, and even without cash, many families managed to get along.

The "new crop" of people entering troubled times, have loads of debt, houses they cannot afford, and may have rushed into buying at hyper-inflated prices... they have car loans/leases, cell-phone contracts, student loans, and many have never known anything except increasing prosperity.

The problem is that even if the economy rebounds, will there be customers to fill up all the malls, and all the big box stores again?

If the consumers are afraid, and remember how it felt to wonder how they would pay their electric bill, they may just not be that eager to run to the mall every time they get bored.

Credit card companies are already tightening the vise, and as more people default, they will not be getting credit again, any time soon.

Every time I see someone exiting a store, loaded with shopping bags, I always wonder if they plunked down $300-$400 cash, for that stuff, or if they used plastic.. Plastic has turned a whole generation into spendthrifts, and helped create this whole shopping-bubble.

It's almost funny, to watch the faces of some young clerks when you offer them cash.. they almost expect plastic. ..(We paid cash for a car, and the lady handling the transaction was totally flummoxed, and got the manager to help her.:)..)


If shopping does not resume (and increase), the people who "used" to have those jobs, will still be out of work, and what will THEY do, to earn money?

Going back to school, is an option, but training to do what? and who supports them while they are in school? who supports their families?

Even with a recovery, we have to realize that, as long as we have a service economy of 70%, we will have to accept that a lot of people will not have jobs of much consequence, and that our standard of living will have to decline. No matter what "flavor" of politician is in charge of the government, people who cannot find jobs, will still need to eat, they will still get sick, they will still have children who need to be educated.

We have forfeited a sustainable economy, for a shoppers' paradise version of plenty, in a world that has plenty..plenty of poverty, plenty of problems, and plenty of needy people.

[independentpiney]

1. Your last line really sums it up

Our economy is so consumer based it really does need a continuous supply of bubbles to keep people shopping.

[Liberal_in_LA]

2. Excellent summation

[riverdeep]

3. The economy was unsustainable, it had to fall sooner or later.

It was completely unconnected to our environment or to people's actual needs or means. No one needed a vacuum cleaner robot that cleans for you, or a video game that let's kids simulate a game of baseball when they could just go outside and do it for real. No one needed a 7000 square foot home. And a thousand million other things that temporarily kept the hologram from collapsing.

If we base our recovery on that old concept, it will be building a house on sand again. People need only a few things: after food, shelter and clothing, they need engaging personal relationships of some kind and work that inspires and challenges them. That's it. Everything else is superfluous. Sometimes that superfluousness is agreeable, and sometimes it just distracts, but it's still superfluous.

Anyway, many economists that are not connected to the mainstream rah-rah Wallstreet shows are saying that this will last at least a decade. All Obama can do stave off the worst effects of it, he can't keep it from happening.

[SoCalDem]

5. It's really too bad that he has to come in at such a perilous time

Just imagine where we could be if HE had been the one to inherit a surplus.....

I know that politicians actually like crisis, since history takes more note of them, but I fear that the collective ADD we suffer from will lose support for him, if things are not wrapped up in a pretty bow, and made "all better", in sit-com haste.:(

Media tells us that "people are patient", but once the shit hits the fan in their own family, people lose patience in a hurry.

[Greyhound]

4. Probably not for quite some time because things are probably going to get

much worse before they get better. We are still in the very early stages of this collapse, and as your post points out, we no longer have nearly enough of a real productive economy to sustain our population.

In a "service economy" nothing durable is created, most transactions are once only and so the churn in the larger market is far more limited than in a manufacturing economy. Minimum wage, or near it, becomes The Wage.

Observe the IT professions over the last 15 years to see how "services" operate. You go into a job, you do the job, you lose the job, you look for the next job, repeat endlessly, there is no security as you are always starting over, so you make the starting wage, receive the minimum benefits if any, and work yourself out of the job. Read the want ads for these positions; degree, certifications, and experience required, $12 - $20 per hour. Same position paid $60K - $90K a decade ago.

If we hope to have something to pass on, we will have to get back to making things, and in order to do that we must protect our own workers and our frequently forgotten small businesses.

[Ichingcarpenter]

6. John Hodgman saves the economy by declaring Emergency Christmas.

If you missed this on the Daily Show, John almost always sums it up
with his irrelevance and humor.


http://www.thedailyshow.com/video/index.jhtml?videoId=218379&title=You're-Welcome---Fixing-the-Economy

[BlooInBloo]

7. (shrug) That's why they call it "tough times", I suppose.

[blues90]

8. We did al the right things then it fell apart

We never bought a new car or a house and always bought used clothes and furnature but through a sudden loss of my job everything went to hell and we were forced to use credit cards and only because we thought it would be temporary but it was not what either of us expected.

I felt at the time when internet sales became the easy way to buy crap that many people would and many did go for that option as these internet ad's came to you and showed people all the latest stuff one could buy and have your credit card handy.

I look around here and see nothing but newer and new cars and wonder how these are being paid for and it is difficult to find old cars because these catch my eye most.

Some people will weather this fine but it looks like many will not.

Now we are stuck with credit card bills and don't know what to do now since there is no work and no way to keep up.

For the most part I don't think most people who have been hit will ever see things quite the same ever again , I know we won't.

All I can say it this is a very scary place to be in always wondering when.

[SoCalDem]

9. Probably some of those "new" cars you see will be "going back"

when the lease runs out, or when they miss some payments..
We see a lot of "news" ones here too, but we buy used, and then keep them until they "die":)

All we can do, is to keep plugging along, and to try and save money..

We got rid of credit cards , years ago, and have never been happier about a decision (we did keep on for emergencies, and use it just enough to keep it active).

It's always easier to run up a debt than it is to pay off:(

I hope your circumstances improve soon :hug:

[blues90]

10. I saw one fellow a few weeks ago looked like his SUV was

repo'ed. Right in front of out apt in the street he was removing everything which the police nd a tow truck stood by . Here in Hollywood it's difficult to tell what's what but there sure are a lot of new cars.

MIne is a 1973 VW squarback that I got used in 1985 fro $650 and fixed it up myself and that's all we have but it does the job.

What I did have that was worth anything which was mostly tools and stuff I sold right after I lost my job and it took a year to find another and I was laid off after 4 1/2 months and now there is nothing out there and I did every single search and interview imaginable and after over a year of that there are no interviews offered.

I have worked in the ford dealerships for 35 years and you know how bad this has become. At 60 there is no re-training or money to do so . I even went to vocational rehab and was accepted but once you see the main person who works for the state and they lead you to believe there are jobs in their reach then with that you are in a group which is run as an out sourced company what they do is show you how to use the internet and fill out ap's well I know how to do that so that was a waste.

You reach 60 and it's almost a lost cause. My wife is on SDI and after I finally hit the break down after over 20 years of panic and anxiety attacks which I thought I had under control I am now on disability and we sit here wondering about the credit debt we brought on hoping things would never get this bad. Well they have.