American economic paradox
This is just going to be angry rant, so I don’t rally care if you agree with me or not.
It’s funny how the media and the financial advisers all over the country had been preaching (more like shouting), how Americans are not saving enough; how we’re spending more than we produce; how average American has more that $16,000 in debt (not counting the mortgage). They have been shouting to us how we need to save more and spend less. They have been indoctrinating this religiously into our heads for the past 15 years. That’s all you‘ve been hearing in the papers and news. I think it’s a sound strategy. They were really onto something. And I mean this without a shred of sarcasm.
Well, what do you know. As luck would have it public is finally starting to listen and is starting to save while cutting back on consumption. Result? Whole fricking system is collapsing. Bottom falls out. Retail is hanging on a thread. Auto industry is probably going to collapse or go bankrupt. Banking has already collapsed (if you didn’t get bailed out by the Government of course) .Even gas prices are plummeting. Because of all this, people are loosing their jobs and cannot afford to go out and spend money on useless crap. Lot of them cannot even afford necessary things. It looks like a total collapse.
Now, the same people in the media and financial advisers are asking, in fact begging, Americans to start spending again to prevent economy from total collapse. They even talking about giving you another stimulus and tax cuts, which is essentially your money you earned, which it turn you will spend and will get circulated back to the stores and businesses, so they can keep their poor run and already failed operations going.
These are the same people that few months ago were bitching about Americans spending too much and not saving enough. Are you fucking kidding me? Two words to them: fuck you!
The fact is (and there’s really no way of getting around this) that the whole system got accustomed to the standard of living that was unsustainable for more then two decades or so. Now, when everything is getting back to where it should’ve been long time ago (back to living within or below means), analysts and media are talking about the collapse and how we need to start shopping again for the things you’ll never need, so retail and corporations can start making profit again. Again, fuck them. The only way these motherfuckers can survive is if you start spending more while getting deeper into debt. Otherwise they cannot exist. If most people in The United States lived below or within their means, and were trying not to get into debt, half of these corporations wouldn’t even exists. There’s simply not enough purchasing power without using borrowed money; which are credit cards and loans.
This is not the collapse. It’s a severe correction with justice. I say fuck them. Keep your money, don’t buy unnecessary things, build up your savings and let whoever was leeching off of you go under. That goes for banks, auto industry, retail and other bloodsuckers. Don’t give them a dime. Yes, it will be severe and lots of people will loose their jobs, but it will happen anyway. I’d say we bite the bullet now and start letting everything unsustainable fails. We will be much better off later. Not sure who said this but was right on the money: “If corporation is too big to fail (AIG anyone), it is too big to exists.”
Just think about this: auto industry has been making crappy products for years, and now when people are starting to turn to foreign cars, auto industry and media have nerve to call you unpatriotic for not purchasing their crappy product. They’re using patriotism to lure you into buying their crap. Short of going to people homes and making them purchase their product under the gun point, that is as low as they can go.
And more importantly: don’t ever let any financial analyst, adviser or media tell you what to do and how to spend/save your money. Use your good judgment and logic. These bloodsuckers care only about their ratings and making profit off of you. Not only that but they’ve been wrong on not only things that they predicted but on the things they were happening in the present. How stupid or dumb you have to be to accomplish that?
Strive for anxiety free life. That means: no debt, no mortgage and hefty savings. Only then, loosing a job that you don’t like will seems like blessing instead of hardship.
Tags: american economy, economy, Money, saving money, Shopping
I would disagree with the first part and say that the media and government has been screaming spend spend consume consume for the last two decades, not preaching to save and spend less. The government certainly has not been a role-model in economic responsibility or frugality. Remember Bush’s stimulus checks? Go spend and prop up our corporate crony capitalism model! We finance invasions with constantly inflated fiat currency (the dollar is only worth 4 cents what is was in 1913, when the Federal Reserve was created) that not only cost us money and blood but respect and leadership in the world. The Fed has artificially kept interest rates low for years allowing people to buy things they had no business buying in a normal market. We claim to be free market capitalists all the while continually bailing out poorly run companies (how many times have been bailed out Chrysler now?) that should be allowed to fail, go bankrupt and be taken over by someone who might actually try to produce products people want and make a profit. We’re now falling into the trap of ‘too big to fail’ as an excuse for back room bailout deals from Paulson and his elitist cronies to bailout all his internationalist banker friends with our tax dollars while they take spa trips that cost half a million dollars or they take bailout money and then invest it in China.
I completely agree with your sentiment about being called unpatriotic. My dad used that one on me when I used to have a Honda…which was made in Ohio…His ‘American’ GMC pickup was made in Ontario and his Monte Carlo was made in Mexico. Ha! You’re immediately called unpatriotic and accused of not supporting our troops if you even dare oppose one of our illegal and undeclared wars.
I accept the definition of patriotism as that effort to resist oppressive state power.
The true patriot is motivated by a sense of responsibility and out of self-interest for himself, his family, and the future of his country to resist government abuse of power. He rejects the notion that patriotism means obedience to the state. Resistance need not be violent, but the civil disobedience that might be required involves confrontation with the state and invites possible imprisonment.
I say let them all fail. Let the market take its course as it should. No bailouts, no propping up crap companies. Return control of our money to the People where it belongs and not a group of private banks. Cut our spending by huge amounts by bringing our troops home and not building bases the size of the Vatican in foreign countries. How would we feel if France showed up and said…we’re gonna put a base in Louisville? We’d tell them to get the fuck out! We need real free trade agreements, not bullshit managed trade like NAFTA. Theres nothing free about NAFTA. Yes it will be painful in the short time as we incur the correction like you called it..and thats what it is..but if we try to inflate our way out..Which is what Bernake is going to do with his constant helicopter drops of money…The dollar is going to collapse and it will be far worse in the long run.
Except the first part I do agree with pretty much everything you said. There was a one instance (after 9/11) where Bush and co. said that we need to go out and shop, but for the most part, all I have been hearing in financial news is that Americans need to stop spending and start saving more. Every financial adviser on the TV and papers was preaching that.
But aside from that I agree we should let everything fail, and rebuild the system but with regulations of course. You can still have free market with oversight.
We need to get back to actually owning homes and apartments, and not having paying it off for the rest of your life.
Prefect customer for auto industry is a guy who buys new car on a loan, drives it for a 3 years and then gets a new one. Also on loan. It’s a never ending cycle. Why would they want to produce better cars that can last for decades. They need turn around, like everything else is becoming. We the people (no pun intended) are the ones who needs to say no and put a stop to this circus. Once we do, they will adjust their business plans and strategies. Trust me. Because that is what free market does.
I will strongly disagree with both you. Your arguments–while morally sound and logical–are just simply unrealistic.
We live in the age of global capitalism, with local variations sure, but capitalism nonetheless. The last time this global system threatened to collapse was in the late 1920s Europe and what did we get as a result: the rise of global fascism and communist dictatorship that attempted to do exactly what El Gribbo said “return control of our money to the people.” The alternatives to global capitalism not only failed utterly, but have cost millions of lives, and a horrendous quality of life for everyday people, from which the Eastern Europeans are still recovering.
This of course doesn’t mean that we need to have rampant capitalism in which regulation has no place. Some of the European countries who learned their lessons from the 1930s have adopted a hybriad socialist-capitalist economy (Sweden) and are doing much better than most other countries (btw, Sweden and Germany have continuously bailed out its auto industries with great results).
I think that there is plenty of blame to go around: people do indeed spend way more than they earn, as does the whole country. Our political leadership has not only been inept, but has played a substantial role in defrauding our economy (two unsustainable wars, a six year long occupation of another country, to mention a few).
Putting all this aside, though, when you say “fuck them, let them fail,” you are just coping out of solutions. First, most economists agree that financial bailout has worked (we haven’t heard of any major or minor financial institutions collapse since then; the lending has eased up among banks). By the way, AIG WAS too big to fail: it had become involved in life insurance, pension funds, etc, all of which would have had a ripple and devastating effect on human lives. Lehman Brothers failed, but they had not been as diversified as AIG (there is a great article about this in the last New Yorker).
So, to say let them fail ignores the political urgency of the government’s need to act. Government officials are elected in order to manage resources, but also improve our quality of life. Any government who lets a huge auto-industry such as the American, fail, is committing a political suicide. I think what we witnessed the other day on the Senate floor with Southern Republicans rejecting auto-bailout, is another nail in the coffin of the Republican Party. It is a fact that a massive collapse of the auto-industry will lead to millions of jobs lost (from the auto assembly worker, to the waitress working in the cafe shop next to the plant, to the worker’s landlord who can no longer collect his rents, etc). The Great Depression would potentially look like a field day compared to this.
And yes, the auto industry has made serious mist-steps, especially after the last Chrysler bailout when they were supposed to go to more hybrid cars and they instead opted to buy the Hummer. But the latest bailout has serious steps in place to make sure the auto industry restructures itself, becomes more environmentally conscious (like their European counterparts), and more competitive. This is why the bailout entails the appointment of a car czar with substantial powers (he would be nominated by Obama) to oversee this. And by the time they are up for review, the Obama administration will have had some time to start with its massive restructuring of our economy, pouring billions of dollars into renewable energy. This, in turn, will probably absorb many workers from the failed car companies, or from the inevitable downsizing (as there are already training programs for wind power mills and other green sector jobs).
So, in short, while I agree that everyone has to live within their means, there is a way to do that without letting the entire system implode. Again, the example of many European economies is useful. But this will require a restructuring of our entire economy: a stronger welfare system so that people are not forced to borrow every time they lose jobs; a reformed health care system so that people don’t go into bankruptcy proceedings every time someone gets sick; and a better education system so that we can compete with China for example.
To say, let them fail, ignores the reality of millions of Americans whose very lives are at risk. Government has a political and moral responsibility to prevent this from happening whatever you or I might think of capitalism, per se. Knowing this full well, the Obama administration will embark on a massive deficit spending (essential at times like this) which I think will get us out of this mess, with hopefully, few lessons learned.