France was the first to use the word force, and the UK was close behind in calling for action against Syria. The backlash has left both countries backing out of the use of force. Should we call it appeasement? I do not believe military intervention in Syria benefits anyone. Assad is one devil, and the insurgents are backed by terrorists or the hidden devils. Europe sounds impotent as it did in handling Germany in the 1930′s. The US is a flawed nation, but the responsibility is default to America to handle Syria and now Russia.
GDP for the first quarter of 2013 registered at 3%, some areas of the economy cannot find the skilled workers needed to fill jobs in the new advanced economy. The technology giants of Apple and Google view a different economy in comparison to the reality. The perceptive is that the economy is gaining a foothold in a real recovery is deceptive to say the least. Apple or Google are similar to New York in their perception of the economy. That perception is very deceptive and dangerous to fundamental core principles destroying and restricting the economy to cause millions to suffer and impacts our country’s strength through the state and federal debt that is evolving problem to solve.
As several factors continue in America, the economy will continue to remain weak and fragile for many people. The nation’s policy on energy is the first major challenge. No real recovery will happen with gas prices at current prices. Second, the long term unemployment crisis is another major challenge that must be handled for the confidence in our economy to be restored again. This is a partnership between companies, government, and people not the analysts on Wall Street.
As a final factor in the economic weakness of our country, the systematic change in attitude must occur in our banking, financial , and monetary system to benefit everyone to teach how to manage, borrow, and invest money. These three factors in our economy are causing a weakness and draining the economic strength of the entire nation utilizing the talents of it’s citizens to provide widespread economic prosperity. Until that day, the economic recovery is the experience of a few benefactors and statistical data sent from Washington.
China Insurance Building (中国保险大厦), Shanghai (Photo credit: thewamphyri)
America, Europe, and Japan are the major economies with a evolving debt crisis, and the cause of a slow global has been pegged on either America or Europe’s troubles as Japan has recently been on the world stage as the devaluation of yen or the ” currency. wars” has been recently covered in the media. As debt issues are rapidly happening, America and Europe were thrust with Japan in the first months of 2013 with burgeoning debt issues. The argument is that the developed economies and not the emerging economies are facing the same sovereign debt issues. The recent revelations of India and China are facing debt issues that threaten both economies within the next several years. Even though both countries face issues on two different fronts. The sovereign debt crisis is not one countries problem but a problem on a global scale.
In India, the emerging economic powerhouse after China has fueled growth with exporting goods from the country, but two exports including energy and gold are creating a trade deficit of 5.3% of GDP above the acceptable the 3% trade deficit to handle volatility in the markets impacting internal affairs of the country. Second, Moody’s rating agency cited India in stating a negative credit outlook due to monetary policy producing high inflation, loss of competitiveness in exports due to monetary policy, and foreign currency to fund deficits that is making the situation worse. India is forecasting a 5% growth in GDP for the current fiscal year that will be the lowest growth rate in the last 10 years. The funding of deficits through international borrowing leaves the country with a weakened currency and vulnerable to international upheaval in the marketplace. The fact is that India must make policy changes in internal monetary policy or face a crisis over the country’s debt in the next four years. The high growth emerging economy is beginning to feel the impact of debt on the country’s slowing growth. A crisis is not imminent as in America, Europe,and Japan. A crisis looms in the near future.
The fastest growing world economy is China, and the debt threat is not the same challenge as in India. The vast country has regions and towns where regional banks, cooperatives, and business to business are the lenders in specified region. This risk is the inability of repayment of loans made under the regional lending structure, and the local government are unable to intervene and guarantee the repayment of a loan or pool of loans. This would cause the local region to fail, and the domino affect would happen in China as one goes so does the rest. Local governments have set a precedent to prevent any corporate defaults, and have been successful thus far. What would happen if loan defaults occur in a certain region. The central government and regulators are unfamiliar with the linkages between the governments and local lenders. The exploration of implementing local preventative or rescue methods because the question of a regional debt crisis is not if but when will it happen.
The debt crisis being inclusive to America, Europe, and Japan. The emerging economies are burden with their own internal debt matters that threaten future stability in both nations. Asia being able to shield from the imminent debt crisis in aforementioned countries is not possible. The debt crisis will impact both India and China in the next several years unless a change of internal policies is near. The only question is a crisis elsewhere would accelerate a debt crisis in both countries. For that reason, the sovereign debt crisis is truly a global affair.
The threat of sequester in America is the first taste of austerity in the world’s largest economy. A microscopic version of what America faces is on show over in Greece, and the austerity measures are impacting every facet of Greek society. Strikes are commonplace as the latest round of protests as government workers did take part in the planned Anti-Austerity strike to show the people’s anger over the economic situation not showing any improvement but the continued decline of the economic situation. Greece did receive a second bailout package in December, but the citizens were placing hopes in the ease of austerity measures. The austerity still holds firm in Greece with high impact negatives in the country. America faces sequester, and this first round of austerity will be harsh as $85 billion in spending cuts will take place beginning in March. The truth is the slow spread of austerity in America will take longer and be more painful than Greece. Greece is much smaller with Europe to financing them from total collapse. America must find solutions to current spending to manage the current unsustainable course of deficit spending and debt. The American process begins with sequester and the last chapter is unknown, but being the top economy and the reserve currency will insure a slower, more painful, and alone in no other country or system can bailout the US government.
In the 2008 crisis, the economy was near collapse as the financial crisis almost sent the American economy to the brink. America was able to use extraordinary measures in lieu of its economic power and status to deflect the abyss. Greece is part of the Eurozone and uses the Euro as the country’s currency. The country is a smaller country with billions in GDP not trillions, and the public sector is the primary employer for the country as the country is more socialized than the United States. The country was priced out of the bond market in 2010 and European Union and International Monetary Fund had to become financier of Greek debt to sustain Greece pursuant to the country would meet target austerity measures. Austerity has forced deep cuts into people of Greece as layoffs and economic decline is two impacts of austerity. The recent bailout package was the hope for Greece to a bottom in their country’s peril, but things are getting worse.
Austerity Assembly1 (Photo credit: Philbo Monsbaggins)
n Wednesday, the trade unions held a general strike where 2.5 million Greeks took to the streets or did not show for work as protest to the harsh impact of austerity to the people of Greece. The December funding by Europe and the IMF did not slow the economic decline in Greece. The situation is getting worse, and the citizens are become frustrated. The economic fragility makes a 24 hour strike cause more economic upheaval. The chaos in Greece should cause Americans to study the impact of sequester implementation will cause in the United States. The country will not be pushed to the limits such as Greece, but layoffs of millions alone will cause damage to the American economy. The politicians and citizens are not in the reality of what the future holds. Congress should be working together not acting as ideological rodents using talking points and blame like a rat going time and again for cheese. Citizens should contact Congress and demand action, or face the consequences of bad policy and dysfunctional government are acceptable because of social issues more align with a personal belief. A politician has no moral clarity on any social issue if he or she sits back without working to sensibly solved the sequester and debt crisis in the country. Who is going to care about social issues if there is no America to express the freedoms to decide what a person believes? Social issues are making the public complacent, and ideology is making the politicians dangerous in governing our nation. Google Greece, a shocking discovery awaits you, and it is coming to America.
Sid in front and Cody in the back are 15 year old Jack Russell Terriers. This picture was taken back in 2000. These fellows strive to be human beings everyday. Heart and spirit are our humanity. The dogs seem to have us beat lately.
Posted by Michael • April 18, 2012
So the U.S. standard of living is getting crushed, and the trend shows no sign of abating. That, at least, is the case according to this article:
TheStreet.com: US Standard of Living Down 50%+ Since 1970
As I wasn’t even around in 1970, I certainly can’t make any sort of personal-experience comparisons to the average standard of living (SOL) then and now.
(Though I can pretty much state, unequivocally, that rock ‘n’ roll music was far better then. In that regard, I’m pretty confident that we’ve seen a decline in quality FAR greater than 57 percent. But I digress.)
The article’s an opinion piece, and clearly marked as such, but right here’s where the elephant steps on your toe:
Using the year 2000 as the numerical base from which to “zero” all of the numbers, real wages peaked in 1970 at around $20/hour. Today the average worker makes $8.50/hour — more than 57% less than in 1970. And since the average wage directly determines the standard of living of our society, we can see that the average standard of living in the U.S. has plummeted by over 57% over a span of 40 years.
Hmmm. Reminds me a lot of what I read in The Two-Income Trap back in 2003, except that this guy uses words like “rape” and “parasites” to describe the treatment of “average” families today by Big Business and the government. (Not that I necessarily disagree in all cases. ‘Cause I don’t.)
But here’s the part that totally lost me, where our esteemed author is discussing structural unemployment:
Technology always eliminates jobs faster than it creates new opportunities. This means that our economies are permanently reducing jobs (and creating structural unemployment) every day, every week, every month, every year. For more than 200 years, our governments have dealt with this permanent structural unemployment problem by shortening the work week every few decades…until now. The refusal of our governments to shorten the work week (while we have the worst structural unemployment in history) is a deliberate attempt to maintain massive unemployment — which is the strongest downward driver of average wages.
Uhhh … say what? I mean, I know the PC revolution was pretty hard on typewriter makers and all, but … say what? And how does shortening the work week help increase average wages? (For most folks I know, if you’re not working, you’re not getting paid — politicians and welfare fraudsters excluded, of course.)
Oh well. It’s late, and I’m probably just missing something.
Like how much better the beer probably was in 1970. There’s your pinnacle in standard-of-living, right there.
Healthcare- Why allow emergency rooms to be cattle stalls for the uninsured ? All debt is written off for tax breaks by hospitals?
The funds could be allocated to subsidize clean community health centers for all citizens. Pay per affordability.
One subsidy will provide a healthier physical and fiscal community and lessen costs due to the proactive measures of health in the community
Education – American children know safe sex at 18, but personal finance savings and credit is not. Which impacts life first sex or money?
Financial System- The Federal Reserve under Ben Bernanke did use every tool to jump start the economy and the consumer banking system. The tools would work as the models predicted or calculations demonstrated, but the aggregate impact could not jump start the economy. The Federal Reserve cut benchmark rates to near zero and flooded the banks with cheap cash for the banks to lend out in the communities, but credit was tight and small business and credit worthy consumers were excluded in the credit squeeze. The banks had the money, but they did not lend but spent in government debt and day trading to reap huge profits. The Federal Reserve did not understand the missing component because it could not be calculated or structured into a model for a computer to determine the end scenarios.
Relationship of bank(company)-consumer-and community was broken and destroyed. Bernanke was the great student of The Great Depression, and he was a master of theoretical solutions to avoid a bank run as in the Great Depression. The removal of the fundamental relationship banks played in the role of consumer and community. Business and community financing drove widespread prosperity through communities large and small before deregulation…
My father was an inventor of a plant food fertilizer, and he went to the local bank in his early 20′s with his idea, plan, and zero dollars. My dad was supported by the local bank. That does not happen in banking today.
Ben Bernanke did not get it because it is an emotion of a relationship. Emotions do not play a role in economic policy.
April 10-12:30 pm EST Analysis One-Europe’s markets closed on steep losses with Italy taking a 5% at the closing bell. The kissing cousin routine being played with the European Central Bank along with banks in Portugal, Italy, and Spain has fooled no one. The transfer of risk is the only accomplishment in gobbling as much sovereign debt to place a facade of normal conditions in the demand of European debt. The poor bond sales in Spain were spiking yields and fears in Spain and Italy and brought in Portugal using banks to dump bonds and borrow record money from the European Central Bank to submerge it’s country ugly sovereign debt crisis.
This action is not a true market scenario as it is a bunch of cousins kissing and keeping the mess in the family. Investors and the world gave a loud shout about the real confidence about the European Union debt ridden states. This is a warning shot, and America do not smirk when reading this article because the tick tock on the debt clock grows closer at hand.