Lambert here: And some factions in the powers that be want to throw deflation into the mix, it seems. That should give demand a boost!
By Raúl Ilargi Meijer, editor-in-chief of The Automatic Earth. Originally published at Automatic Earth
That title may be a bit much, granted, because never is a very long time. I might instead have said “The American Consumer Won’t Be Back For A Very Long Time”. Still, I simply don’t see any time in the future that would see Americans start spending again at a rate anywhere near what would be required for an economic recovery. Looks pretty infinity and beyond to me.
However, that is by no means a generally accepted point of view in the financial press. There’s reality, and then there’s whatever it is they’re smoking, and never the twain shall meet. Admittedly, my title may be a bit provocative, but in my view not nearly as provocative, if not offensive, as Peter Coy’s at Bloomberg, who named his latest effort “US Consumers Will Open Their Wallets Soon Enough”.
I know, sometimes they make it just too easy to whackamole ‘em down and into the ground. But even then, these issues must be addressed time and again until people begin to understand, and quit making the wrong decisions for the wrong reasons. People have a right to know what’s truly happening to their lives, and their societies. And they’re not nearly getting enough of it through the ‘official’ press. So here goes nothing:
US Consumers Will Open Their Wallets Soon Enough
People are constantly exhorted to save, but as soon as they do, economists pop up to complain they aren’t spending enough to keep the economy growing. A new blogger named Ben Bernanke wrote on April 1 that there’s still a “global savings glut.” Two days later the Bureau of Labor Statistics announced the weakest job growth since 2013, which economists quickly attributed to soft consumer spending.
The first problem with Coy’s thesis is that even if people open their wallets, far too many of them will find there’s nothing there. And Bernanke simply doesn’t understand what savings are. His ideas through the past decade+ about a Chinese savings glut were always way off the mark, and his global – or American – savings glut theory is, if possible, even more wrong. In the minds of the world’s Bernankes, there’s no such thing as people opening their wallets to find them empty. If they don’t spend, they must be saving. That there’s a third option, that of not having any dollars to spend, is for all intents and purposes ignored.
The U.S. personal savings rate—5.8% in February—is the highest since 2012. “After years of spending as if there were no tomorrow, consumers are now saving like there is a tomorrow,” Richard Moody, chief economist at Regions Financial, wrote to clients in March. Saving too much really can be a problem when spending is weak.
The little man inside, when I read things like that, tells me this is nonsense. So I decided to look up how the US personal savings rate is calculated. Turns out, it’s another one of those whacky goal-seeked government numbers. At least, that’s what I make of it. Mainly, though not even exclusively, because of things like this, from a site called Take A Smart Step:
[The personal savings rate in] November 2012 was 3.6%, this is not even close to where we need to be for financial health. This savings rate barely gives us enough to handle emergencies, and makes us as a nation weaker. The government calculates the personal savings rate as the difference between the after tax income and consumption of Americans. So they include not only retirement savings, but debt repayments, college savings, emergency fund savings, anything that was not spent.
Making paying off your debt (i.e. money you’ve already spent) count towards your savings is a practice fraught with questionable consequences. But useful for economists, and accountants alike, no doubt. The problem with it is that it hides reality behind a veil. Because debt repayments are not really savings at all; people are not free to spend what they put into paying off debt, on something else, like iPads, cars or trinkets. Not even on hookers or crack cocaine, for that matter.
For the vast majority of what is paid off in debt, there’s no such thing as free choices. People pay off debt because they must. Or, to look at it from another, wide lens, angle, Americans would have to stop servicing their debt payments if they want to ‘start spending’ again.
Going through the numbers from various sources, I can see that the US personal savings rate is presently some 5.8% of pre-tax income, and debt repayment is close to 10% of disposable -after tax – income. I’m still trying to make those stats rhyme. But no matter how you read and interpret them, it should be clear that debt repayments are a large part of ‘official’ savings. Even if they really shouldn’t be counted as such.
Of what remains in real savings, retirement/pension savings must necessarily be a substantial percentage, and it would be weird to call those things ‘saving like there is a tomorrow’, if only because they are about, well, tomorrow. But that seems to be the new normal: creating the impression that saving any money at all is somehow detrimental to the economy. A truly crazy notion, if you ask me. Let’s get back to Bloomberg’s Coy:
There are only two things you can do with a dollar, after all: spend it or save it. If you spend it, great—that’s money in someone else’s pocket.
In someone else’s pocket, but no longer in yours. Why would that be so great? It’s only great if that someone has added value to something by doing productive work, not if you simply swap paper assets.
If you save it, the financial system is supposed to recycle your dollar into productive investment with loans for new houses, factories, software, and research and development.
That notion of ‘the financial system is supposed to’ refers to theories such as those that Bernanke and his ilk ‘believe’ in. Theories that have no practical value. What is normal for many everyday Americans is crippling debt levels, and no such thing is recognized in these theories. After all, according to them, whatever amount of dollars you get in, you either spend or save them. And if you use them to pay off previously incurred debt, you’re supposedly actually saving, even though you no longer have possession of the money in any way, shape or sense, nor a choice of what to spend it on.
But if no one’s in the mood to invest more and interest rates are already as low as they can go (as they are in much of the world), the compulsion to save can sap demand and throw people out of work. For the U.S. economy, the good news is that the jump in the personal savings rate is probably no more than a blip. Three economists from Deutsche Bank Securities in New York explained why in a March 25 report called ‘U.S. Consumers: Still Shopping, Not Dropping’. While noting a “deceleration” in consumer spending, they wrote, “we think that concerns about the outlook for the consumer are overstated.” Their model of the U.S. economy predicts the savings rate will fall to 3% to 3.5% by 2017.
Oh sweet lord. Now a falling savings rate has become a beneficial thing, even when and where savings are very low. Not saving will allegedly save the economy. How did that happen? If we may presume that debt repayments will continue virtually unabated, and there seems to be little reason to think otherwise, this means that by 2017 there will be just about nothing saved at all anymore in America. Which means there’d be very little left of the ‘If you save it, the financial system is supposed to recycle your dollar into productive investment’.
The only ‘growth’ perspective America has left is to grow its debt levels continually, continuously and arguably exponentially.
Other economists have also concluded that the spending dropoff is temporary, which is why the slowdown in job growth, to just 126,000 in March, didn’t set off many alarm bells. “Consumer spending is starting to look more and more like a coiled spring,” says Guy Berger, U.S. economist at RBS Securities. One sign that consumers aren’t retrenching: On April 7 the Federal Reserve reported that consumer credit rose $15.5 billion in February, in line with the recent past.
They got deeper into debt, and this is a sign they’re not ‘retrenching’? A coiled spring? Really?
According to Deutsche Bank Securities, the first reason to think consumers will resume spending is that their incomes are rising. Annual growth in average hourly earnings has averaged about 2% since 2010, which isn’t great but does exceed inflation. With more people working as well, aggregate payroll outlays are up 4.9% from the past year, according to Bureau of Labor Statistics data.
The rises in stock and home prices should make consumers more willing to live a little, say the Deutsche Bank authors. They calculate that households’ net worth is almost 6.5 times consumers’ disposable personal income. That’s the highest ratio since before the housing crash.
But that last bit is arguably all due to QE induced asset bubbles. Not an argument the author would make, I know, but nevertheless. Coincidentally, another Bloomberg article published the same day as the one we’re delving in here is called:Why Your Wages Could Be Depressed for a Lot Longer Than You Think. Perhaps the respective authors should have a sit down.
No question, the high savings rate depresses spending in the short run. Purchases of durable goods, from cars to couches, remain well below their 60-year average share of GDP. But all that saving helps consumers get their finances in order, which will allow them to satisfy pent-up demand for that sweet new Ford F-150.
No no no: they just paid off part of their debts. How can that possibly mean they’ll go out and get a new F-150? In real life, they spent their money instead of saving it. Either way, they don’t have it any longer to spend on a F-150. It would mean they need to get into new debt. On top of what they still have left over even AFTER paying down part of it.
Fed data show that financial obligations including debt service, rent, and auto leases are about their lowest in comparison to disposable income since 1981.
Hmm. According to Wikipedia, “Household debt as a % of disposable income rose from 68% in 1980 to a peak of 128% in 2007, prior to dropping to 112% by 2011.” It’s about 105% today. So that’s just a very weird statement. Someone’s wrong, very wrong, and I think I know who that would be. Maybe Peter Coy conveniently ignores mortgage payments when he talks about “financial obligations including debt service, rent, and auto leases”?!
When consumers are ready to borrow more, it won’t hurt that, according to the Fed’s survey of banks’ senior loan officers, banks are easing lending standards.
See? That’s what I said: they can only spend if they acquire new debt. They’re just getting rid of the last batch, and it’s going mighty slowly at that. Lest we forget, when debt as a percentage of income falls, that is due to quite an extent to people failing to make any debt payments at all, and losing their homes and cars. This is a dead economic model. This model is pining for the fjords.
These factors add up to an optimistic consumer.
Oh, c’mon. What is that statement based on? That ‘sky high’ savings rate that is really just poor slobs paying off what they can in debt repayments so they won’t get hit with even more fees and fines?
What I think these factors add up to, is a delusional reporter. There is no excess saving. It’s ludicrous. As far as people have any money at all, they’re using it to pay down their previously incurred debts. And that gets tallied into their savings rate by the government’s creative accounting methods. That’s all there is to the whole story. But it will, regardless, induce a few more poor souls to sign up for more mortgages and car loans and feel like happy American consumers on their way down into the maelstrom.
It’s sad, it really is. Maybe we should first of all stop referring to the American people as ‘consumers’. That might help.
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Ah, you have missed the point entirely.
It doesn’t matter if the average American is dirt poor. The rich will make it up in volume.
India today has like the fourth largest economy in the world (well depending on how you measure it). And yet, half the Indian population is chronically malnourished, with a standard of living below that of late medieval Europe. How did that happen?
Simple! India has like 1.3 BILLION people. So what if most of them make 50 cents an hour? That’s profitable! That’s why India’s internet tycoons build ENTIRE SKYSCRAPERS with 600 servants as personal residences, and they scream that the Indian people simply must be forced or tricked to breed like rodents because people are the ultimate resource – well, they are if you consider people to be cattle.
And it can happen here.
We’ve been hearing about “savings gluts” for the last eight years; it was ridiculous eight years ago and it’s ridiculous today. It doesn’t matter whether you’re talking macro or micro, it’s all BS.
Just as Mr. Ilargi Meijer says here relative to individuals, Mr. Stockman said it plainly today relative to Nations over at his ContraCorner site – None Dare Call It Fraud—–Its Just A “Savings Glut”
It’s fraud and debt, and plenty of it.
Can you spell disintermediation?
The following question is serious.
We have a percentage of the population that does not really have a retirement because at 0.02 percent, interest, $1,000,000 in savings gives a return of $20,000 before they start stealing in back.
I’m not sure what credit cards cost these days, but I doubt that it’s much less than 20%.
Payday loans probably still take in 300-500% APR, and people with serious emergencies, medical or otherwise, are probably still paying it – not realizing that 1 month quickly turns into 1 year. If it’s been outlawed ijn some places, it’s likely that the same thing goes on under a new name.
A few companies like Prosper are able to put some people who need money together with others who need an investment. After the first couple of years, they actually figured out how to price credit in a way that kept their investors from losing their shirts.
The money is there – the demand is there. So why are Chase and BA still there?
I think Ilargi is spot on.
Consumer spending? How much stuff can we consume? Peak stuff arrived in the US years ago, we have stuff galore. We have so much stuff that we have to rent extra storage space to store our stuff. And once you decide you have too much stuff and want to get rid of some of it you find out that getting rid of stuff is more expensive now than buying the stuff in the first place. I think Americans have all but decided that they have enough stuff. And not enough money.
We moved back to the US in 2008 from overseas, where stuff was expensive and dear but labor was cheap. Back in the states within a couple of months we got these things free off the sidewalk (since getting rid of stuff is so expensive here people put their unneeded stuff out on the sidewalk as freebies just to get rid of it)
Free sidewalk stuff we’ve gotten in just our neighborhood:
3 working televisions, undesirable older models
Quite a few bicycles, most of which we’ve given away
And entire set of Pyrex mixing bowls
Several backpacks
A bookshelf
A perfectly working microwave
TWO barbecue grills
Luggage
Patio furniture
A perfectly working Mr. Coffee
The list of free sidewalk stuff we haven’t taken because we we can’t haul it away is much longer. Every time somebody in our neighborhood moves they just put all their things out on the sidewalk.
This thread on City Data is eye-opening as well. Boomers can’t get rid of their stuff. The kids don’t want it and have no place to put all of it, their kids are in urban micro apartments where that stuff will not fit. And there are not enough of them to even take all the great free stuff their families are looking to get rid of.
http://www.city-data.com/forum/retirement/2335674-millenials-dont-want-our-stuff.html
How long do these economic geniuses think Americans will keep going into debt to buy more stuff??? Into infinity?
In 2008 we found ourselves in our mid 50’s, out of work, stranded, in debt, and sleeping on the floor. We have recovered slightly since then and have spent the last 7 years voraciously paying off half a lifetime’s worth of debt. Valuable lesson right there – even if the whole world goes to hell in a handbasket whatever debt you own you owe till the end of eternity no matter what -. So these numbnuts think that after nearly a decade of financial ruin and with those debts nearly paid off we’re going to do it again??? Seriously??? Are these people just plain stupid (that’s a rhetorical question).
Not to mention we have never recovered our pre-crash wages or jobs. Our housing expenses have gone up, utilities have gone up, decent quality food has gone up tremendously, and our healthcare expenses have SKYROCKETED. In other words our earnings have been whacked and our basic cost of living has escalated wildly.
And they think we’re stupid enough to just charge a bunch of Chinese made crap on 18% – 27% interest rate credit cards to buy stuff we don’t need?
One has to wonder what world these ‘economists’ live in. It surely is a different place from the rest of us or they wouldn’t be so mystified by refusal of Americans to go back into debt, or as they like to call it ‘credit’.
Peak materialism? Interesting concept, considering that the #1 strategy is to bribe people with endless stuff. No matter what our rulers do in the world, so long as they provide us with stuff we go along with them continuing to run things. Seeing we are a society that worships comfort and convenience having loads of stuff is a natural fit. People must first reevaluate what gives their life meaning before one sees any change. I’d suggest people putting stuff out on the sidewalk are simply making space for the new stuff they are bringing in. I don’t see too many people thinking outside the matrix. Until they begin thinking for themselves they’ll simply default to the usual habits: comfort, convenience and STUFF.
Great post. Stuff is a huge issue in modern Sodom and Gomorrah.
I see stuff as mostly the things you are allowed to have in this society, when the average person is not allowed to have much, especially of the things that would be more meaningful than stuff.
For instance they aren’t allowed pretty much any control over their work or working conditions. They are not allowed much time for the other things besides work they value. Even the most meager of influence over what is allegedly “their” government and thus how their society is run, they have to be near the point of revolution to gain (as they were during the New Deal). Because otherwise, it always flows back to the rich and powerful like water flowing downhill. But stuff you are allowed. They choose convenience because they have no time (both parents work over 40 hours). They choose bribes because resistance seems futile. I don’t think it’s necessarily futile, but it would probably be bloody.
And I want to add that the new stuff is made like total crap. $70 spent on a microwave that after one year will only work if I stand there and hold the door shut. Two expensive propane heaters ($175 each) that broke down during the second Winter and the propane company says they can’t be fixed because the part is unobtainable. The silk blouse that lost 3 out of 5 buttons the first day I wore it. All of this stuff is made in China where, we were told, this would benefit Americans with cheaper prices. Well, the prices aren’t cheap but the products are. From now on, my stuff is coming from yard sales, flea markets and, yes, the sidewalk.
I’ve often wondered why this isn’t considered a form of inflation: paying the same for something and not getting quite as much (or something that has been crapified).
Because that would inject reality into economics.
“Valuable lesson right there – even if the whole world goes to hell in a handbasket whatever debt you own you owe till the end of eternity no matter what”
interesting and probably true, half the planet LITERALLY underwater due to climate change? You still owe debt! But on the other side of this savings can be gone in a poof. Oops the stock market just lost half it’s value, sorry 0% interest rates got you into it. Oops your bank account was backing derivatives, sorry, take a haircut for the big boys. But debt, to the end of eternity.
“Our housing expenses have gone up, utilities have gone up, decent quality food has gone up tremendously, and our healthcare expenses have SKYROCKETED. ”
And yet, we are told there is no such thing as inflation -and some are running around worried about deflation.
There is a serious credibility issue here – a lot of people flat out don’t believe these things. It runs contrary to their (perceived) everyday experience.
“even if the whole world goes to hell in a handbasket whatever debt you own you owe till the end of eternity no matter what -. ”
Nope. 10 years
“if you use them [dollars] to pay off previously incurred debt, you’re supposedly actually saving”
When you make debt payments you are transferring that portion of your income to someone else…so it becomes someone else’s income and they could potentially save…minus what is skimmed off as profits to the banking sector, which is savings for the top side of town.
Of course, people that receive your debt service as income are likely to have debt of their own, so the big winner in this game is the banking sector.
Savings is the money you have…all of the dollars in the non-government are savings. It may not be so obvious that you can’t spend your (prior) savings until you have spent all your income…it’s impossible.
And, since the bulk of savings is held by the top 5% of the income spectrum, “savings” is a net drag on the rest of us because the interest it earns has to come from somewhere, and we are the “somewhere”…in the net we are losing this game too.
bernanke is right insofar as one can be right claiming a mathematical truism. however, the combination of a savings glut and economic stagnation is the inevitable outcome of politics of inequality. as more and more wealth is concentrated into the hands of the very few, they end up with more than they can ever spend while those who have little can spend all they have and not make an impact.
Absolutely correct–the savings are as mal-distributed as the wealth. Averages mean nothing in a country with a couple thousand billionaires and 40 million people in serious poverty. I’d like to know how many Americans, compared to 1975, have banking accounts of any kind. How many have retirement plans in place. How many personally own stocks and bonds (not this “I’ve got 50 thousand in a retirement account so that makes me a stock holder” bullshit). We are again faced with my old bugbear; when you have 310 million people and 15 million of them are doing just fine to great, and those 15 million are so overwhelmingly concentrated in a few areas, they lose sight of the 295 million who are doing OK to terribly. The old “local notables” who could represent the suffering in their communities to the Powers that Be either no longer exist or are no longer connected to the upper echelons who are hermitically sealed off from the larger population. Information and what passes for understanding proceed outwards from a few centers to the rest, with little or no feedback. Economists and pundits are either blind to this phenomenon or completely taken in by what gets generated at the center (or, more nefariously, they only want to cater to the needs and prejudices of those in those centers–see Thomas Friedman for the most gold-plated example).
Economists and pundits are either blind to this phenomenon or completely taken in by what gets generated at the center . . .
You are too kind.
If economists and pundits are blind to the phenomenon you describe, they are crappy economists and pundits, and if they get completely taken in by what gets generated at the center, corrupt. Both conditions mean they are worthless, and it is a total waste of money keeping them in the style they are accustomed. Fire therm all, they are the useless eaters.
As Paul Singer has said:
“Nobody can predict how long governments can get away with fake growth, fake money, fake financial stability, fake jobs, fake inflation numbers and fake income growth. Our feeling is that confidence, especially when it is unjustified, is quite a thin veneer. When confidence is lost, that loss can be severe, sudden and simultaneous across a number of markets and sectors.”
ahh, you miss the entire point of these theories. it’s not to find a solution, it’s to figure out something that supports the oligarchy.
My income declined by nearly 100% when I lost my job nearly 2 years ago (I have some minor investment income). A few months away from being 60, my chances of finding employment in the Obama/Dem/Boehner/McConnell austerity economy is, for practical purposes, zero. My spending is limited to rent, food, prescriptions, utilities, gas, insurance and a few other odds and ends. I don’t eat out or go to movies or sports events. I’m obviously not planning any major purchases or vacations any time soon. I have penalty-free access to my retirement savings now but will not touch them until I have to. Even then and when SS kicks in I will be spending very carefully. This is one consumer that will probably never be “back” to the way I was.
No longer a “consumer,” now like so many if us an attempted survivor…
“The only ‘growth’ perspective America has left is to grow its debt levels continually, continuously and arguably exponentially.”
Which is why this thing called capitalism is effectively a pyramid scheme. Only those at the top benefit. Cognitive disonance.
Fortunately, the American Proletariat are quite docile.
They inflated assets to save the 1%, wouldn’t the next step on the return to a normal economy be deflation for the 99% ? Or does that still not fit into their definition of recovery? … ie
It’s funny, they seem to be arguing that the 99% are the real job creators without actually saying it, even the Bernanke.
Yup, customers are the job creators. No customers, no jobs.
The Fed apparently has the ability to control inflation, wouldn’t they also have the ability to control deflation? A controlled deflation might be exactly what this country needs and it would be a re-balancing of the Fed’s skewing of the economy since 2007-08. Suddenly I’m all for deflation. Go figure haha.
A re-balancing of how the Fed skewed the markets could be just what we need. They say they have to ability to control inflation, then wouldn’t it also follow that they have the ability to control deflation to not let it get out of hand? Since the Fed’s intervention the things we need are much more costly – you name it, food, energy, college, medical care and on and on. I’m all for a controlled deflation to get back to some semblance of normal.
“wouldn’t the next step on the return to a normal economy be deflation for the 99% “
…which would make our debts bigger, i.e. debt service as a percentage of income would rise.
Fail to see how that would be a net positive for the 99%, who hold a lot of debt, but don’t have much in the way of (net) savings.
Prices would fall to meet lower incomes and restore affordability. Debt service would only only be a problem if wages fell, otherwise it’d be much more affordable to pay off with the saving from real price discovery. In the Great Depression the prices of everything fell 30-40%, making it much more affordable for those with some money. Here, that wasn’t allowed to occur. The most obvious deflation now is human value in the equation and along with that, wages.
Does the author know the difference between national and personal savings?
this is a really poorly written article. I understand the general premise but it is argued unconvincingly and the evidence adduced is hardly as comprehensive as it should be.
moreover, does the author really thinks citing wikipedia is appropriate? perhaps at a high-school level…
The reason the financial press is still crowing about the imminent return of the consumer is that the markets and firms reward bulls, not bears. Nobody likes a bearish call that turns out to be right and bearish call that turns out to be wrong leaves one discredited in a way that a wrong bullish call doesn’t.
The job of the financial press is to cheer-lead, not bring a dose of reality into the conversation. Nobody wants reality, they want a perpetual bull market, the financial press is just giving them what they want.
“In the minds of the world’s Bernankes, there’s no such thing as people opening their wallets to find them empty. If they don’t spend, they must be saving. That there’s a third option, that of not having any dollars to spend, is for all intents and purposes ignored.”
Well, there is a third option – they are in debt, and whatever dollars they DO have MUST go to service the debt, or they will be evicted from their homes and live on the street.
As Illargi continues:
“Making paying off your debt (i.e. money you’ve already spent) count towards your savings is a practice fraught with questionable consequences. But useful for economists, and accountants alike, no doubt. The problem with it is that it hides reality behind a veil. Because debt repayments are not really savings at all; people are not free to spend what they put into paying off debt, on something else, like iPads, cars or trinkets. Not even on hookers or crack cocaine, for that matter.”
NO Hookers!!! No Crack!!!! :(
But if you do look at it from Bernanke’s perspective, most economists, and some people on this very threat, its all accounting and math (if you have a dollar and I have a billion, we average 500Million!!! BOOYAH!!! – is this a great country or what???). And of course, true enough – in the same way the rich man is as free to sleep under a bridge as a poor man. If Goldman Sachs has all sorts of bad debt, there is a FED to make it all better and supply them with money ((which they can use to make more money to pay back the “debt” (or money) they were given (or loaned at ridiculously low rates) by the FED)).
How many people who lost their homes are in the same position? Bernanke seems unable or unwilling to understand that most Americans do not spend because, unlike Goldman and their ilk, which has the FED to backstop any bad debt, the average American is completely on their own and in a perilous position in American if they can’t service their debts (indeed, they go to JAIL if they can’t pay their fines….)
Indeed, I would argue the US is hopelessly corrupt, and actively and consistently takes actions that advance the prospects of the wealthy and hinder the prospects of the not wealthy.
And don’t get me going that real saving are needed because health insurance is really just the entry price to admittance to a hospital – any serious medical procedure is going to cost you thousands, if not 10’s of thousands….
So paying fees and interest on top of the purchase price for, well, anything is considered “saving” money. Got it.
“…there’s still a “global savings glut.”
Well, if this grotesque parody is what’s passing for financial propaganda these days, someone please notify Brookings that they might as well shut their doors. Seriously, it’s pitiable beyond comprehension. That such an eminence as the person of Bernanke is reduced to nothing more than a position of cheap shill for the economic elite, regardless any compensation, gives new light to the term aristocratic cannibalism. Perhaps there truly is some justice in the world after all. Wake up 1 percenters!
Most of the 1% are the equivalent of head butlers and head chefs . . . not the owners of the mansions or the fine restaurants. But they make their money from the mansioneers and the owners so they identify upward. They will identify upward till they find themselves “let go”. Will someone have a theory-of-what-happened ready for them when they are ready to hear such a theory?
“…a theory-of-what-happened…”
What message could that theory carry? That you dance for the puppet masters until your usefulness is over? I think they already know., at least in a way. That’s why so many are ‘getting theirs’ before the end. To try to save, invest and hope that some time in the future they will have enough to at least have a secure retirement. The problem being the sheer voracity of the greed of others that derails them. The constant “All for me and none for thee” chant from the top of the 1% is certainly camouflaged by the steady propaganda of free markets which except on rare occasions never existed. Yet I have no doubt that those who are pushing it are aware of what they are doing. They know, and they’re getting theirs…. unless they don’t.
A lot of the people I used to work with wanted to believe that propaganda. I did. But what you find is that no matter how many years of experience and rungs up the ladder you go the benefits are somehow stripped by rising costs of one thing or another. Occasional unemployment or sudden and strange illnesses, bad investments, bad economies, inflation, disinflation, fraud. Pick your poison. You begin to suspect that somehow things are completely rigged and begin to search for the answer, the why. You think if you understand the why, you can escape it. When you find it, it’s unsettling because it’s nothing more than the insatiable, voracious greed of a few. But your stymied by the reality that it can only be opposed by allying with those of similar understanding. Where do you find that???
Shelby Foote wrote in his narrative of the Civil War that while the troops of Robert E. Lee were suffering malnutrition and lack of supplies under Grant’s siege at Petersburg, Virginia prior to it’s fall, the suppliers to Lee’s army were enduring lavish feasts that most never saw except for holidays and making bets of tens of thousands of dollars a throw in the casinos just north in Richmond.
There’s a sufficient supply of money already in the economy this very day that could supply all the necessities for each household in the US. Housing, food, clothing and shelter. But most of it lies at the top of the pyramid called the 1% and they insist it’s needed for their casino economy.
Vicious, insatiable, voracious g-r-e-e-d eating out the substance of mankind. Fit your pictures?
Thank you for an insightful article.
In my view, just more subtle propaganda from the corporate MSM. And consistent with past patterns of behavior, they are blaming the victims of their failed policies.
In an economy based on extraction and consumption, widespread poverty benefits the long-term viability of the planet to sustain life. Saving money becomes a political act. Resist the global corporate behemoth by hanging onto your meager savings. Starve the beast.
The Bernanke aught to be crowing about the elites he bailed out not spending their money to spur the economy. The largess went almost all to them. But really, is it their fault? How many yachts do they have to buy to make the Bernanke happy and spur the economy? Of course they have to save, or just throw it away. They’ve got so much they don’t know what to do with it, so it languishes in vaults collecting ungodly interest. Thanks Bernanke and ilk for nothing, and keep your hands out of my pockets.
We’re either near or at a tipping point where Americans (and many other world citizens, even in the developing world) start to become aware of how they are being manipulated re: the need to consume beyond reasonable need, and how they have been played for stooges.
No easily seen “revolutions” will rise out of this awareness, but people *will* adapt to the engineered decease in their disposable incomes, because they have to (many will fall by the wayside, ruined and discarded – a tragedy).
Even if people don’t have resources, they are compelled to at least try to adapt. These many adaptations are going to have a cumulative effect – and they are going to interact/network with each other to create something very different than the consumer society that is driving world politics and economics, today.
One cannot be *forced* to buy things; instead those who sell things have used many clever means to induce us to buy; via our “friends” on Facebook; micro-targeted marketing; claiming “recoveries” that create false confidence; etc. etc. I may be wrong, but the usefulness of these techniques may be waning. What’s next is anybody’s guess, but the adaptive phase has already begun.