TCS Daily


So, Is a Volatile Economy Good for America?

By Nick Schulz - January 16, 2007 12:00 AM

"Most job loss is highly concentrated: more than two thirds of all lost jobs occur at businesses that shrink more than ten percent, and more than one-fifth of workers whose jobs were destroyed worked at businesses that shut down. This explains one of the reasons for the newspaper headlines that trumpet job loss: because job loss is much more concentrated, it's also much more visible."

-- Economic Turbulence: Is a Volatile Economy Good for America? Clair Brown, John Haltiwanger and Julia Lane

Economic populism is one of the more striking features of our politics today. Wal-Mart is excoriated by liberal intellectuals and labor unions. Sen. Jim Webb recently argued that in "the age of globalization and outsourcing, and with a vast underground labor pool from illegal immigration, the average American worker is seeing a different life and a troubling future." CNN's Lou Dobbs characterizes this troubling future as a result of a "War on the Middle Class."

These populist concerns, voiced primarily on the left, are shared by many conservative Republicans and intellectuals. Writing in the Weekly Standard, Ross Douthat and Reihan Salam argue that "having risen to power at a time when most Americans were worried about losing their economic freedom, the [Republican] party needs to adapt to a new reality--namely, that today, Americans are increasingly worried about their economic security--and reorient its agenda to address those concerns."

A disquiet with our turbulent economic times is at the root of the political concern over economic security. And it has yielded an economic dialogue shrouded in pessimism and unease.

But is it entirely warranted? To answer that, it helps to know if the overall economic turbulence is beneficial or not.

The authors of the new book, "Economic Turbulence: Is a Volatile Economy Good for America?" are not ideological gun-slingers. Clair Brown, John Haltiwanger and Julia Lane have studied the overall impact of America's dynamic economy on jobs, workers and firms by examining in depth five major economic sectors -- semiconductors, software, retail food, trucking and financial services. They are careful not to overstate or inflate claims.

And what they find, given the current climate of opinion about American economic change, is surprising:

"The analysis of literally millions of worker histories and hundreds of career paths for workers and job ladders for firms leads to the reassuring finding that although turbulence imposes short run costs, in the long-run job change leads to improved jobs for most workers."

What's more:

"Although a major concern has been that 'good jobs' (meaning high-paying jobs) have been lost as a result of economic turbulence, this is not the case..."

and that

"The general idea that low-wage workers have suffered as a result of economic change does not hold up. Although there is high worker turnover at the bottom end of the earnings distribution, low-wage workers have typically gained ground."

The authors present no brief for laissez faire government policies. They frequently point out that there are workers who get pinched by economic changes and we would be wise think more clearly about how they might be empowered to cope better in a turbulent world. They make suggestions for a possible "interventionist policy" or two.

But more than anything they help clarify the picture of what's actually happening with job loss, job creation, and overall economic change in America. Yes, economic turbulence can yield a kind of psychic unease -- unease that's exploited for political gain. But that same turbulence is also the source of significant beneficent changes. If this is a War on the Middle Class, we should want a troop surge to keep it going.

So if the dynamism of the American economy is, in the main, advantageous for Americans, why do we hear about so much more about pain and dislocation and so little about the benefits?

The quote at the beginning of this piece is a good place to start. Job losses tend to be highly concentrated, making for good media fodder. Just last week an announcement came down that Sprint-Nextel is set to cut 5000 jobs. When was the last time you read about a firm creating 5000 jobs in one stroke? Job creation is more gradual than job loss by comparison, but over time there are more than enough jobs created, and better ones at that.

Moreover, the economic role played by innovators and entrepreneurs is typically couched in terms of new products they create (anybody heard about this iPhone thing?) The role played by entrepreneurs in new job creation is frequently overlooked or understated. Moreover, innovation and its resultant job creation often happen in less established, and thus less visible, segments within industries or the economy as a whole.

The overall media effect is that we "see" painful employment dislocations much more than we see the uplifting stories of job creation. But with Brown, Haltiwanger and Lane's work, we are now able to see better what's right under our noses.


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36 Comments

I just want to make a point about the future...
Nobody can argue with the fact- the amount of money most workers earn is a function of the national economy. In the U.S. a large trade deficit with China looms over the heads of every American worker as it gnaws away at the dollar. So the answer is to automate. Today I'd like to focus on only one aspect of the world economy where automation will inevitably occur- the restaurant business.

By replacing most of the kitchen workers with machines, restaurants can significantly reduce operating costs. Automated restaurants can sell a quality product at a lower price, and still increase profits. Pizza restaurants, sandwich shops, hamburger stands, chinese restaurants, and other types of restaurants could install new machines and automate their kitchens. Fast food chains can automate, and immediately increase profit margins. Almost every restaurant could become more automated. Although many low income jobs will be eliminated, restaurant owners will earn more money using automation.

Volatility
We live in a volatile world. In many cases, we are a major source of the volatility in the world. However, if we could and did stabilize our economy, that would not eliminate volatility in the world, though it might reduce it to some degree. It would, however, eliminate our ability to respond to future volatility.

If we believe that we should eliminate the volatility in our economy, we then must decide the state of evolution at which we wish to stabilize. Do we want to re-envigorate the New England buggy whip industry, or the New England shoe industry, or the southern textile industry? Or, would we be happy to just freeze the status quo in place? Of course, as the volatile world continued to evolve, we would be progressively less able to maintain our current standard of living, since the rest of the world would be evolving beyond us, at whatever pace.

I believe we have learned to live with volatility; and, that we do it better than the rest of the world. I also believe we should continue to evolve. I plan to try to do so on a daily basis.

Some volatility comes from the fractional reserve system
Some have proposed alternatives.

you raise important points
the interesting political question is how do you get voters to agree that volatility is in their interest?

good points
i'm notmuch worried about the trade deficit, but we will likely see increaed automation in certain sectors, restaurants perhaps being one, although the obstacles to that are high as they are in some other servcie-oriented industries

Convincing Voters
Jobs become obsolete and disappear every year. New jobs are created every year. US population grows every year and total employment in the US grows every year, with only very minor blips.

Individuals can do very little to keep the jobs they do from being obsoleted over time. However, they personally control whether they are obsoleted as well. Lifetime learning is a lot of work, but it beats becoming obsolete.

At current US unemployment rates, very few of the unemployed have marketable skills. Employers are constantly seeking employees with skills and ability, plus a willingness to work.

Suddenly...
I feel so sorry for the buggy and whip laborers and all the others that have been displaced by human ingenuity & creativity, innovation and technological progress over the last two centuries. Gee, and just look at we Americans there are no jobs anywhere; we live in abject poverty. Just how has the economy survived this onslaught of, gasp, progress?

Cut the merchantilist drivel. Take a course in econ and economic history you'll learn that economies grow and change and have since recorded history.

All...
volatility--the so-called business cycle--comes to us courtesy of the Fed and its insidious fiat money system.

No Regulation also affects(corrupts) investment in addition to the Fed.
This volatility is actually the adjustment by the economy to mis-invested capital from protectionist regulation and devalued currency.

The most known form of mis-invested capital comes from the short term cost advantage local produces have against foreign producers when the Fed devalues money. So car builders in the US have a BREIF period where their labor and materials purchased in less valued dollars are against foreign currency.

There are other forms come from protected industries like sugar to airlines. And yes at some point these investments like the former come crashing down too. Or consumers get so fed up that they switch to domestic and foreign substitutes like corn sweetener or low budget airlines.

More neo-con propaganda
You know, guys like the one that wrote this artical complacently cite some book that looks at historical trends based on market dynamics that have changed significantly over time. The dynamic of the global economy is NEW and does not adhere to the same historical trends. Never before have SO MANY Americans been in such direct competition with so much cheap foreign labor. And the greedy corporate fat cats are going to cash in on selling out the American middle class. It will be a short-run cashout...and after its over, America will be bankrupt.

The economics of cheap foreign imports will soon be OVER. Inflation (real inflation, not the phoney bullshit numbers the government gives us that doesn't include the cost of energy, housing, and health care)...inflation will make the advantage of the last 20 years of cheap foreign goods evaporate. The American dollar is about to tank and most in-the-know realize this (China and other folks are starting to sell American dollars for other currencies). Once the dollar tanks, why would anyone invest in America when we are last in education, culture, and other factors (don't believe the hype about our much-vaunted "productivity"...this is a result of computer-automation only, ).

Here's the sobering news. We are 50 trillion dollars in debt (NOT 8 trillion) based on general accounting principles, not the phoney accounting the government does most of the time. Our culture and society have been decimated by immorality, divorce, illegitimacy, drugs, and may other social ills. The current and future generations will not pull us out of this predicament because they are too fat, lazy, dumb, culture-less, family-less, and just plain inferior to pull it off. Couple that with our changing demographics such that by 2050, we will be a majority non-white nation...turning us into anoter banana republic of rich and poor will an almost non-existent middle class.

The economic elites know all of this. They are banking on it. All of the activities of the central bankers, corporate elites, military-industrial-complex, and other elites is actually PUSHING for this ****.

Americans better wake up....the neo-cons have subverted the Republican Party. Its time for the populists, nationalist, and paleoconservatives to kick the neo-cons in their asses and toss these stealth ex-Trotskyites on the ash-heap of history. We need to take the Republican party back from the country-club, Rockefeller, military-industrial-complex apparatchiks. It CAN be done.

We are in a HEAP of trouble here in America. Corruption, greed, and the centralization of power are the problem. And the schmucks that run this website are their apologists, apparatchiks, and agents of this corrutption and greed. They make their living rationalizing it and making it palatable to the lemmings they are attempting to further enslave.

WAKE UP FOLKS ...."a volatile economy is good". Orwell's 1984: "War is peace" ...."truth is a lie".

Yes...
Fed policy sends erroneous price signals and the result is inefficient allocation of resources--land, labor and capital.
Consumers don't get fed (no pun intended) per se; rather they simply respond to prices--just as the investors/entrepreneurs do on the path to the mis-allocation of their resources. The sugar industry being a good example of such; not to mention steel.

You are sincere...and well meaning...but simply wrong...
Heretic,

I can see that you are enthusiastic and energetic about your socialism. The problem, however, is that you cannot solve the "real" social economic problems when you are so very wrong about the mechanics of financial economics. These are nothing more than the tools that create wealth. But if only the capitalists know how to use these tools, then only the capitalists will create wealth. And we will never be free of them. The volatility we suffer is to be at the mercy of someone else who calls us his "human resources".

We do have problems. But more than that, we have opportunities. There is nothing sacred (or magical) about the mechanisms of capitalism. We are living in the Post Industrial Society. We can use these tools too. All of the tools. Including the banks.

We are actually at the first moment in history that financial capitalism trumps military imperialism and when the sovereign states are literally at the mercy of their own GDPs in order to compete with each other. However, scaled-down, social capitalism will trump financial economics. We must do this by employing the mechanisms of capitalism to eliminate the proletariat and by making everyone a "partner" in his own incorporated entity as both an economic unit and as a social unit.

If we do not actually eliminate the proletariat by increasing everyone's wealth (as capitalists ourselves) to the point that the concept of selling one's labor to a stranger is made moot then we will never solve the fundamental problems posed by socialist philosophers.

The Communists tried to solve such problems by eliminating the capitalists. And that did not work. You actually need financial capitalism. China is still a one-party republic (the Communist Party) but financial capitalism (with banking) is flourishing there as their economy learns how to rival ours.

Communism is now only the name of their politcal party. It is no longer the way they operate their economy. The struggle between the proletariat and the capitalists has been abandoned in China. The proletariat are working for the capitalists there (for cheap) as never before. And the Chinese workers are very much at the mercy of their own capitalists. But this is far better than to be enslaved to the State.

Let's go over your issues one at a time. Do you want to work on this?

stability = poverty
It was better when the economy was stable and half of all Americans lived in poverty?

labor has always been in competition with labor
why does it make a difference that the labor is in another country, rather than another state?

The official inflation number does include energy, food, etc. The Fed also maintains what the economists call the core inflation number that excludes these things, precieely because they are so volatile. Up substantially one month, down substantially the next.

Any more paranoid fantasies you want shot down?

Nice!
Screeches of alarm with no evidence except for somehow being "in the know". Insults and personal attacks. Conspiracies of the "elites", Neocons and Trotskyites (oh my!). Racist fears of the vanishing white man. A bemoaning of the perceived shortcomings of the current generation and American culture in general.

And then nicely wrapped up with a idiotic equivalence to Orwell's 1984.

Yup. A typical iHeretic post.

On the plus side volitility, volitility might teach people to save...
Of course the Federal Reserve's policy of maintaing a level (though low) of price inflation is a strong discouragement to saving.

BTW Some have argued convincingly that fractional reserve banking Causes volitility in the overall economy



Simple....its the concept of a "nation"
Competition among various States in the "United" "States" is valid because its within the nation. But certainly, legislatures within given states can and do protect industries and jobs within their states (as well as promote job growth and education).

Pat Buchanan was right....we are more than just "an economy", we are a "nation". You neo-cons have no concept of nation. For instance, the issue of illegal immigration. For your ilk, this is just a means of decreasing the cost of labor...i.e. depressing wages. Of course, the fact that it puts lots of lower-income AMERICANS out of work is of no consequence to you. I know SEVERAL blue-collar families that can barely get by now because of the effect of illegal immigration on their incomes. And what is your f.u.cking answer? Your answer to them is "learn something new". Your answer is "a volatile economy is good for us"....your answer is "you income going down the drain is good for America". Its NOT good for America, its good for the friggin bankers and corporate fat cats getting rich off the short-term ill-gotten gains from selling out the American middle class. How in the hell do you expect someone to start a new career or new profession at 40 or 45? Preach your bu.ll.sh..it to the unemployed carpenters, plumbers, and other tradesfolk whose standard of living has been decimated by cheap illegal immigrant labor.

You are traitors...America is rejecting the neo-con globalist vision of a worldwide pool of cheap labor slaves. You will lose BIG-TIME in the upcoming elections...you are going to be repudiated. The Right has figured you out....neo-con subversives...apologists for plutocracy.

You will lose....you'll see.

The NeoCons are going to lose BIGTIME in the upcoming elections
Just like Clinton was the best thing to happen for the Right...and his socialist agenda and immoral meanderings ushered in the Contract with America...so too will the neo-cons (who are not conservative at all) usher in the New Left.

Thanks to the greed and corruption of the Republian Party ...with ONE TRILLION (with a "T") dollar wars (hundreds of billions of dollars for the military-industrial syndicates)...illegal immigration/open borders...the North American Union (NAFTA "super highway" and the "Amero" currency)...spending and deficits that boggle the mind...offshoring of entire professions....

...basically, the neocons have declared war on the middle class and are attempting to suck them dry.

Guess what...the middle class KNOWS this now. You will lose...and I blame you and your kind for electing Hillary Clinton in 2008.

Thanks a lot a.s.s.holes...

If job loss is so good, why isn't everyone trying it?
The conclusions these authors come to regarding displaced workers and beds of roses are not reflected in the work of others studying the problem. The authors have this to say:

"The analysis of literally millions of worker histories and hundreds of career paths for workers and job ladders for firms leads to the reassuring finding that although turbulence imposes short run costs, in the long-run job change leads to improved jobs for most workers."

"Although a major concern has been that 'good jobs' (meaning high-paying jobs) have been lost as a result of economic turbulence, this is not the case..."

"The general idea that low-wage workers have suffered as a result of economic change does not hold up. Although there is high worker turnover at the bottom end of the earnings distribution, low-wage workers have typically gained ground."

But here's what Michael H Moskow has found. And he's no flaming leftie-- he's the president and CEO of the Federal Reserve Bank of Chicago, and has been studying job displcement for a long time:

"Another topic discussed was the cost of job loss for displaced workers. Many displaced workers have skills that are highly specific to their employer or industry, and the value of those skills often disappears along with their jobs. Displaced workers often take a long time to find a new job, which translates into large chunks of lost income. More importantly, even after they find new jobs, displaced workers earn about 17 percent less, on average than in the job they lost. Research has shown that this gap in earnings tends to persist for up to 10 years. Moreover, from 2001 to 2003, job losers with education beyond high school suffered greater earnings losses on their new jobs than in any previous period for which we have data."

So that it may be that after a ten year average readjustment period people are back to where they were before. But the income losses they have accrued during those ten years constitute a serious injury to their families. In many cases they lose homes, vehicles and other assets. In virtually every case they accrue debt that's hard to pay down. And in every case they must adjust their life styles radically downward.

So the bed of roses approach really does not reflect reality. Read the article first, and consider what it has to say.

http://www.chicagofed.org/news_and_conferences/speeches/2005_05_26_arbitrators.cfm

The savings problem
The kind of volatility the article is discussing relates to the massive job losses, and therefore income losses, inherent in our kind of economy. Are you saying that if we were to go back to the gold standard fewer careers would be forced into the tank?

I'm googling "fractional reserve banking" and "volatility" and just getting a bunch of returns on price volatility, money growth volatility, interest rate volatility, etc. These things have little to do with job losses due to outsourcing or to automation or to downsizing.

Also, please expand on the idea that price inflation-- a trend I don't think is all that apparent anyway-- discourages saving. The obvious fact, to me, is that earnings have eroded.

During a period (2000-06) when labor productivity rose by 18%, wages only increased by one percent.

The root cause putting aside savings is impossible for so many people is that they can't live on the money they're making. They are forced to avail themselves of easy credit, and get themselves in trouble when they can't pay their way out again. The trigger most often is normal life experiences routinely encountered, like hospital bills or careers ending, according to the data accumulated on the subject.

nations
just because someone draws a magic line called a border, that somehow changes the basic laws of economics?

Man, you are paranoid.

everyone is
According to roy, we should still have buggy whip makers and no high tech industry.

He actually believes it's the job of govt to make sure that nothing ever changes.

Neocons under your bed!
This country could have done without Clinton and to say he was good on the basis of political gain is to identify yourself as nothing but a partisan hack and a tool.

Greed and corruption (real and imaginary) are not merely Republican qualities. They are just the only ones reported or investigated.

So let's go through your list:

Trillion dollar wars just for the sake of the military-industrial complex conspiracy. Standard issue rant. If one merely ignores the reasons for the war and the good that has come out it, and will come of it, then one can believe that it was merely to put money in the ECO's pockets.

Illegal immigration. Neither side of the aisle is doing anything about illegal immigration. At least you seem to add the "illegal" aspect don't seem to be one of those idiots who opposes legal immigration which is valuable to our country.

NAFTA. The devastation to our economy that was predicted has not occurred and considering the current state of our economy I don't see those dire predictions materializing anytime soon. The North American Union conspiracy means that you need to stop reading WND and read a little more Sowell. Free trade, if it is real free trade, is good and America can prosper and be competitive in such an economic environment.

Spending and deficits. Deficit spending is nothing new. Growing up under Reagan I read nothing but gloom and doom about the deficits and how my Grandchildren would be paying for it. Yet Reagan's policies established a period of growth that wiped out those deficits in less than a decade. Even now the deficits are constantly going down as intake of tax revenue, with the tax cuts in place, skyrockets. Clearly you don't know what you are talking about in this area.

You are however, correct that spending needs to be cut and government shrunk down to a managable size. Bush has been horrible when it comes to this but the Democrats will be no better.

Offshoring. What is wrong with offshoring? Companies should have the right to place there businesses where ever they wish. This is not the government's doing nor is this "waging war on the middle class". Being in an industry where a great many things are outsourced and can say that many a company is finding that outsourcing is not the cost-saver they thought. A great many of those jobs are coming back. Considering the low unemployment rates one would assume that the middle-class is not having a problem holding a job.

I will lose? I am not even running. As for the election, it all depends on who the candidates are. I won't vote for Hilary or Obama or McCain. That much is for sure.

Hilary won't be President and even the Democrats are beginning to realize that. They have sold their souls to the extreme (not the usual moderate) Marxists and Eco-Wackos for short-term political gain and that will haunt them in the long-term.

As for your blame, well I believe you can place that in your nether regions along with your conspiracy theories and ignorance. Now take off the tinfoil hat and step outside for a breath of fresh air. You could use it.

The responsibility to live within one's own means...
is personal and not the responsibility of your boss or industry.

>"So that it may be that after a ten year average readjustment period people are back to where they were before. But the income losses they have accrued during those ten years constitute a serious injury to their families. In many cases they lose homes, vehicles and other assets. In virtually every case they accrue debt that's hard to pay down. And in every case they must adjust their life styles radically downward."

My first critique is that this data is from the burst of the tech bubble and height of the tech outsourcing wave. The numbers you see are from programmers, website developers, and other high tech jobs. Since a great many of these people were making six figures a 17% loss is not as hard-hitting as it is made out to be.

My second critique is that all of sob stories (lost houses and vehicles, debt) are the responsibility of the person who has lived outside their means. Yes, they have had to adjust their lifestyles and, according to today's economy, it has been for the better.

My third critique is that the volatile markets of that period, 2001 - 2003, have spurred an explosion in the self-employed and have created a great deal small companies. So yes, volatility was and is a good a thing.

In the end you can always find a sob story but for the general population, anytime there is stress on an economy to innovate and adapt, i.e. volatility, it is ultimately good for the overall health of the economy.

I am sure this fails to register to a folk Marxist such as yourself but it remains true none the less.

Job loss realities
Your comments betray an obliviousness to, or maybe just an ignorance of, the realities of living on wages that have suddenyl been curtailed.

The first critique is irrelevant.

"My second critique is that all of sob stories (lost houses and vehicles, debt) are the responsibility of the person who has lived outside their means. Yes, they have had to adjust their lifestyles and, according to today's economy, it has been for the better."

When someone who is being paid so little he has been able to accrue little or no savings at the time of his job loss, he os forced to avail himself of the abundant and easy credit being offered to him. Then he has to pay it back. typiclly it takes him (or her) far longer than he thinks to land a new job. And when he does, it pays less than he was thinking it would. All of which demands a restructuring downward.

Typically he needs to get out from under payments already accred for a car. So he puts it in the yard with a for sale sign. But everyone else in town has been laid off from the same mill, so they can't buy it. And the payments are still coming due-- payments he can't meet.

Finally he sells it, for less than what it is worth and less thatn what is still owing. So he now has the car off his hands but still owes on it. And in the event he obtains new work, now he needs transportation to get to it.

It's easy to just hold such people in your grand disdain. But if you're trapped in thier life it's not so easy to get out, simply by following Tlaloc's easy prescription.

Give it a break. Not everyone gets lucky and stays lucky. Some of us at age 18 begin careers in jobs that have always been there until, one day, they're not there any more. And then you are royally stuck. You have to go back to school with tuition money you don't have, and you need to put food on the table until you've graduated, interviewed and perhaps moved to another town.

When you get there, what do you use for security deposit and first month's rent? All these problems can indeed be solved. But the solution involved accruing new and necessary debt-- debt that takes years to pay off while your interest rate stays at a lofty 29.99% of the remaining balance.

These are problems commonly encountered by many hundreds of thousands of families. And not just in the low wage jobs but in the middle range, white collar jobs as well.

"My third critique is that the volatile markets of that period, 2001 - 2003, have spurred an explosion in the self-employed and have created a great deal small companies. So yes, volatility was and is a good a thing."

Ill winds usually bring someone some good. Even the plague boosts business for the undertaking profession. Good for those who manage to start afresh. The numbers say for the ten years following a termination, *most workers* never regain the income they were making before the loss. Some do. Some even exceed it.

"I am sure this fails to register to a folk Marxist such as yourself but it remains true none the less."

I'm sure this will be lost on you, but once again, I have never seen any utility in Marxism. It's an unworkable philosophy and one that has never been mine. And in none of my copious comments have I ever said anything good about Marxism. This is just a persistent delusion of yours.

no roy, it's your post that indicates an unwillingness to deal with reality
You feel that workers should be protected from having anything bad happen to them. And if it does, it's govts duty to make it right again.

The responsibility for protecting yourself against the vagaries of variable income lies with the worker, and nobody else. If you fail to keep enough in the bank that you can't survive several months of unemployment, then it's your fault for buying that new TV, car, radio, vacation, etc.

Reality vs. Roy Pt. I
>"Your comments betray an obliviousness to, or maybe just an ignorance of, the realities of living on wages that have suddenyl been curtailed."

I guess actually having it happen to me makes me oblivious of the realities of it? Tell me, were you working in the tech market from 2001 to 2003? You would have loved the atmosphere of gloom and doom. Right up your alley.

But for those of us who kept our heads before, during, and after, and who planned ahead, we worked through it and came out even if not ahead.

The fact that people believe they are owed a living and a job is their own failure and when that job is taken away they must adapt. For those who sat back and bought all the toys one absolutely must have, times were tough but that is not the fault of society or the government.

One has to wonder when personal responsibility kicks in in Roy's world. I certainly have seen no sign of it yet.

>"The first critique is irrelevant."

Of course it is since it casts a long shadow over your basic premise. Take a low economic point and apply it to a robust economy that bears it no resemblance and one can make any abstract argument they wish.

As usual you dismiss what you don't wish to or simply can't understand. You certainly keep me in constant awe of that open mind of yours.

>"When someone who is being paid so little he has been able to accrue little or no savings at the time of his job loss, he os forced to avail himself of the abundant and easy credit being offered to him. Then he has to pay it back. typiclly it takes him (or her) far longer than he thinks to land a new job. And when he does, it pays less than he was thinking it would. All of which demands a restructuring downward."

I see nothing here that is not the responsibility of the person in question. Has the person attempted to improve his lot? Is he looking for new opportunities? Is he cutting costs and being a smart shopper?

Why is accepting credit not a person's responsibility? More than that, why do you add the "Then he has to pay it back." line? Should not you be required to pay back what you have promised under the terms you have agreed to?

Also, is it society's, or the government's, fault when a person takes a job and discovers that it is not paying him as much as he thought? Really Roy, what kind of moron enters into a job without taken into account their wages?

I am at a loss to understand how any of these issues, outside of the initial loss of a job, are anyone's fault but the person involved.

Reality vs. Roy Pt. II
>"Typically he needs to get out from under payments already accred for a car. So he puts it in the yard with a for sale sign. But everyone else in town has been laid off from the same mill, so they can't buy it. And the payments are still coming due-- payments he can't meet."

He has a car? Then leave the dying town and move to one where they are hiring. Anyone who works for a "mill" these days and believes their days aren't numbered is delusional.

What your apocalyptic scenario fails to realize is that jobs are being created every month and that unemployment is at record lows. If Bubba were still President I am sure your tune would not be so sad. The fact of the matter is that you can get work if you want. The only thing stopping you from getting back into the workforce is pride and ego.

>"Finally he sells it, for less than what it is worth and less thatn what is still owing. So he now has the car off his hands but still owes on it. And in the event he obtains new work, now he needs transportation to get to it."

It is stupid to sell a car when you still owe money on it. The best thing to do is to drive it until they come for it. Then you just hand it over and your debt is settled. How do I know this? Because, once again, I had to do it myself.

Then if you need a car to get to work you buy one on auction or some other beater that costs you anywhere from $50 to $500. If it breaks down you sell it for scrap and get another one. Once again, been there and done that. Hell, I even hitched for a year when I needed to.

All of your examples are examples of stupidity, ignorance of options, or an unwillingness to do what needs to be done. All are examples of personal choices and the responsibility one has to take for making them.

>"It's easy to just hold such people in your grand disdain. But if you're trapped in thier life it's not so easy to get out, simply by following Tlaloc's easy prescription."

Actually, the only one's I hold in disdain are moaners and whiners such as yourself who believe that the Man or the ECOs are to blame and that nothing could have been done, or can be done, to improve their lot or cushion the blow.

My prescription, as you call it, is not easy at all. It requires one to be optimistic, to educate oneself, to read the things you sign, and, most importantly, to not give into the despair that you peddle. Anyone can dig themselves out if they have the will to do so. You may not reach the stars but you can be comfortable.

>"Give it a break. Not everyone gets lucky and stays lucky."

Luck? Who the hell said anything about luck? You make your own luck. Anyone who relies on luck is just as stupid as those who buy into your vision of unavoidable doom.

>"Some of us at age 18 begin careers in jobs that have always been there until, one day, they're not there any more. And then you are royally stuck."

And who is to blame Roy? The corporation that you should have known from the beginning was only interested in profit? Or the person who didn't cultivate other skills when they had the chance? BTW, no one is ever "stuck", they just refuse to move on.

>"You have to go back to school with tuition money you don't have, and you need to put food on the table until you've graduated, interviewed and perhaps moved to another town."

This is what school loans are for. I worked two jobs and went to school to do just this very thing. But I suppose that is your definition of "luck". My sacrifices then have born fruit today.

>"When you get there, what do you use for security deposit and first month's rent? All these problems can indeed be solved. But the solution involved accruing new and necessary debt-- debt that takes years to pay off while your interest rate stays at a lofty 29.99% of the remaining balance."

Your problem is that you believe there is point where you no longer have to strive or improve yourself. A security deposit and first month's rent is easy to come by if you make, *gasp*, sacrifices. A sacrifice can be as simple as asking for assistance from charities if need be. Sometimes the hardest sacrifice is pride but if you have a family to care for you do it. I have always been able to come up with the means by creative juggling of debtors.

Once you have shelter and food then you throw as much as possible at the 29.99% debt and make sure it goes to the principal. It is amazing how fast debt can disappear when you know what you are getting into when sign up for it.

>"These are problems commonly encountered by many hundreds of thousands of families. And not just in the low wage jobs but in the middle range, white collar jobs as well."

Of course, I never said all strata of society do not have money problems. What I am saying is that most are self-inflicted and that the chore of solving these issues are ultimately personal.

>"The numbers say for the ten years following a termination, *most workers* never regain the income they were making before the loss."

You mean those numbers from a time of economic upheaval and market adjustments? Oh, I forget that little truth is inconvenient... I mean "irrelavent". Your numbers can be generated by a person who was making $120,000 (a programming position) who now makes only $80,000 (still programming).

Gee, who could live on that?

>"I'm sure this will be lost on you, but once again, I have never seen any utility in Marxism. It's an unworkable philosophy and one that has never been mine. And in none of my copious comments have I ever said anything good about Marxism. This is just a persistent delusion of yours."

You do nothing but criticize capitalism and corporations. You believe that when one prospers that others must suffer. You believe there is a concerted effort, sometimes under the guise of conspiracy theory, to hurt the middle/working classes and love to scream "class warfare" whenever you can. You have stated countless times of the need for government to step into all manner of economic matters. And most importantly, you have shown support for socialist policy and socialist leaders time and again.

Your latest was your love of Chavez and his socialist policies and how they were just so good for the poor. You wrote off those of us who called him a socialist even though he used the word himself. Now he has proven us right and you wrong. Something I am sure you should be accustomed to by now.

It makes me wonder if you have any understanding of what socialism is and the destruction it has caused since you seem to support the thesis but are revolted by the term. Whether or not you wish to admit it, you are a leftist and a closet Marxist.

You hit the nail on the head!
Workers are more productive, but are not making more money. Corporate profits have doubled under Bush, but almost none of it went to the middle and lower classes. Personal debt is a reflection of people's inability to live on what they are being paid (plus a general lack of financial disciple among many).

Personal debt however, is really another thing...its pressure to work. Debt must be paid with money earned by working. Debt keeps people working, which is what the slave-masters want. People are really working to pay debt and nothing else...this is almost slavery. Too many folks really own nothing and what they do own (in terms of net worth) amount to paltry retirement accounts that really don't have enough in them in the first place.

There are a LOT of people who are leasing cars and getting interest-only loans on houses...this has increased greatly. I wonder what the numbers are on the actual amount of equity that the middle class has....let alone the total net worth of the middle class.

this link sums it up: http://bigpicture.typepad.com/comments/2006/02/fed_stagnant_ne.html This article basically says:
• Rising debt has offset the boom in housing;
• Inflation continues to eat into family cash flow;
• Income remains stagnant;
• Savings has slipped to zero;

Most of the net worth of the average american family comes from retirement accounts or other investments that will help them to retire. So really, work like a slave, own nothing, and live like a pauper when you get old.

Meanwhile, the rich just keep getting richer...

I understand your point
You can ridicule caring for your fellow man if you like. Many of us are like that, and wouldn't help their brother out of a hole if he fell in.

Others are like the guy in the New York subway, who jumped in to save a man having a seizure.

It takes all kinds. You're one. I'm another.

The tone of these neo-con ass-wipes speaks volumes
Listen to them. Basically what they are saying is they don't give a rats ass about their community, about their society, about culture, about thier nation....no...the only thing that matters to these scrooges is what they can get there own little greedy hands on and all else and others be damned.

Greed....plain and simple.

We must and should do things to protect our families, communities, localities, cities, states, and nation. This is not friggin "Marxism"...its nationalism and commmunity.

The neo-cons derive mostly from a nation-less tribe anyway. That is why they have developed such a materialistic/internationalist view. They are not Americans. They are CERTAINLY not Christians....oy veh!!

Welcome to the House of Cards
When I was a child it was normal for people to earn their money first, and then to spend it. We operated in a cash economy. Improvident types were few and scattered-- the guys who left their family belongings in the pawn shop until they got their finances straightened out. And never came back to redeem them.

But then it became normal to make your major purchases on time payments. Because most people weren't making enough to afford to walk into the furniture store and put down all cash for that living room suite.

And later on, as wages continued to decline, uses had to be found for all that money that ended up in the hands of investors. So they expanded the credit card business to include everyone. Now the credit economy was in full bloom. And we could afford the luxury of buying everything first, and then have to worry about how to pay for it.

So a lot of families went under, and had to declare bankruptcy. Naturally, the laws had to be changed to make it harder to do this. But it comes about from the fact that we can't quite live on the money most of us are making.

Meanwhile predator outfits like Capital One have perfected a system where they give you multiple, low-limit cards. So if you fall into trouble on one you have to pay it off with the next, etc, until the whole house of cards starts to fall. You're paying exorbitant mutiple late fees and penalties each month, giving over all your income to interest and barely touching the principle. It's legal loan sharking.

The alternative is to drive a Yugo and bring your kids up in a trailer. And plenty do that too.

More and more of the old timers are retiring now to face the fact that the pensions their companies guaranteed them aren't coming. The pension funds are all drying up and the federal pension fund guarantee corporation is running dry as well. Next they want to dismantle Social Security.

So how will people continue to support the consumer economy by buying more crap? Easy. We'll just raise their credit limits to the infinite horizon, and retake every dime they earn as part payment on their humongous and perpetually growing debt.

I think this is why the science fiction writers of my youth all used to call the money of the future "credits".

you don't care for your fellow man
because everyone one of your solutions involves taking someone else's money, and for the most part, giving it to you.

You believe that because I don't support you in your attempts to steal from others in order to support yourself, that I don't care for my fellow man.

I'm willing to bet that I give 2 to 3 times as much of my income to the poor than you do.

Please post the passage
in the bible, in which Jesus instructs his followers to steal from others in order to help the poor.

personal responsibility
in roy's world, personal responsibility doesn't kick in until you start making more than roy does.

Additionally, that personal responsibility not only covers you, it also covers responsibility for taking care of roy as well.

You missed the subtle innuendo idiot
My side is winning....and will continue to win. The internet is making this possible. The reign of kosher media is over.

...btw, the sentence in the previous post alludes to the fact that so much of this liberal laize-faire internationalist crap comes from JEWISH neocons...

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