The Fed likes to brag about the “We saved the world” recovery.
However, the unfortunate truth of the matter is a record Half of American Families Live Paycheck to Paycheck.
Does it Matter? Let’s investigate.
Unprepared for Nearly Anything
- 50% are woefully unprepared for a financial emergency.
- Nearly 1 in 5 (19%) Americans have nothing set aside to cover an unexpected emergency.
- Nearly 1 in 3 (31%) Americans don’t have at least $500 set aside to cover an unexpected emergency expense, according to a survey released Tuesday by HomeServe USA, a home repair service.
- A separate survey released Monday by insurance company MetLife found that 49% of employees are “concerned, anxious or fearful about their current financial well-being.”
Deleveraging? Where?
A Fed study shows U.S. Households Will Soon Have as Much Debt as They had in 2008.
The Federal Reserve announced Friday that the U.S. has $1 trillion in credit-card debt. Consumers hit that number in the fourth quarter of 2016, but eased on revolving credit during January 2017. The Fed announcement showed revolving consumer credit hit more than $1 trillion once again in February 2017.
“Credit card debt is rising quickly, but delinquencies are still really low,” said Matt Schulz, a senior industry analyst at the credit cards site CreditCards.com. “Many Americans are doing a good job of controlling their debts, but eventually with big debts and rising interest rates, it’s likely that something will have to give.”
Paycheck to Paycheck “Good Job”
Excuse me for asking but if half the nation lives paycheck to paycheck, is that really indicative of doing a good job at managing debt.
And as for “low delinquencies”, I remind you of my April 26 article Subprime Credit Card Losses Bite Capital One: Income Down 20%, Charge-Offs Up 30%.
Nonetheless, I remind you of an important perception.
We Saved the World
- Wall Street Journal Oct 4, 2015: How the Fed Saved the Economy
- Washington Post August 26, 2009: Ben Bernanke: The Man Who Saved the World
- Forbes Oct 5, 2015: Ben Bernanke On How The Fed Saved The Economy
- January 12, 2013: How Tim Geithner Saved the Banks—With Ben Bernanke’s Help
Two Reasons Not to Worry
- The stock market and housing are still going strong. We heard the same thing in 2007 but it’s different this time.
- The bottom 50% of the economy simply do not matter.
The real crux of the matter is point number two.
The Fed does not give a damn about the bottom half of the economy even though it spouts continual lies about “income inequality.
The Bottom 50% Do Not Matter
As long as the Fed can keep stocks and home prices elevated, there is no concern about the food-stamp, rent-subsidized, Medicaid-supplement, disability-income, Obamacare-subsidized 50% of Americans struggling paycheck-to-paycheck.
That money rolls in guaranteed, month after month!
That 50% cannot afford a house is irrelevant as long as suckers keep paying $500,000 to two-bedroom shacks in LA.
The game is to keep asset prices up so that the top 50% keep spending. The bottom 50% are taken care of by government (taxpayer) subsidies noted above.
Here’s the real deal: Fed Expects a Second Quarter Rebound, Higher Equity Prices.
Repeat Performance
The Fed needs to keep asset prices elevated even though it’s pretty clear concerns are mounting over bubbles.
Can the Fed save the world again?
Previously, the bottom third did not matter. Then the bottom 40% did not matter. Now the bottom 50% do not matter.
That statement is a bit over the top. By how much I don’t know. But the trend is clear, as is the fly in the ointment.
Brexit was the first warning shot. Trump was the second.
As soon as the bottom 65% don’t matter, those 65% may vote to take matters into their own hands.
Mike “Mish” Shedlock
The slaves didn’t matter much wrt how well ‘”the economy” was doing in Antebellum, either…
Here’s a neat tidbit:
In a “society” where 1% of the population owns 99% of all wealth, yet those 1% produce nothing of value to justify that distribution: The 99% who between them own only 1%, can literally double their wealth by disposing of the above 1%. Even if the process by which that disposal takes place, as a side effect flat out destroys 98% of everything in the country. 98% of all buildings, roads, utilities, everything. And 99% of the country will STILL be twice as wealthy as they were, before they “wised up” and got fed up…….
I mean, even the Hutus didn’t come close to 98% destruction of everything, and those guys were pretty reckless in their disposal efforts…
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I beg to differ. I would say abut 80% of the population is wasting air just being alive. In parts of South America and I’d take that up to the mid 90’s – although there is some fine breeding stock down there.
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Have you ever heard of the Pareto principle?
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Most people likely have not.
Mitt Romney was caught on a live microphone bemoaning the lower 47% that doesn’t contribute anything and he was made into a villain for saying as much.
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You can’t say it publicly – not PC. Remember it’s the bankers, 1%, Mexicans, etc fault. Never the fault of the whiners bad life decisions. Find me one comment in any comment section where someone blames it on their decision to have spent the evening watching TV instead of studying for an exam.
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these doodz studid an they sayin its gooood to watch tv man
http://www.telegraph.co.uk/news/health/children/10138281/Letting-children-watch-hours-of-TV-improves-academic-ability-study-claims.html
An I dont have no tv so im just sayin cause that meens im stoopid an cleva folk noh better eithawais
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Crys,
In all fairness – TV today is kinda impressive. History channel, Nat Geo, Discovery, multiple foreign news channels… not like my days of Bugs Bunny to Gilligans Island to Happy days followed by Dallas… or in your case Benny Hill.
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….though I didn’t spend much time in the UK, and Benny Hill it wasn’t… Bagpus and the Falkland’s war plus an advert for Marmite is about all I remember from TV there…. and this
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Poor people enjoy wealth that King Louis XIV never knew — electricity, indoor plumbing, automobiles, cell phones, television, internet, etc.
Human innovation and relatively free markets, existing in a framework of general peace and property rights no matter how “inequitably” distributed, are responsible for the poor living better than 18th Century kings.
Were the poor to rise up and destroy 98% of Western civilization, far from being twice as rich, the poor would be infinitely worse off. They would revert to the filth and squalor in which they lived before the Industrial Revolution.
Besides, there is no chance of an uprising among the poor happening. To discover why, simply re-read 1984 by George Orwell.
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We are rich beyond measure, that’s true, but it’s the impoverishment of the soul that will kill you. Look at native Americans and the older white men dying at accelerating rates.
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Yep.. ya get yourself Venezuela. But c’mon, King Louis might not have had the internet but he was stylin’. Pimped out crib, carriage and lots a ho’s.
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“To discover why, simply re-read 1984 by George Orwell.”
Actually, as one might expect, we’re in a hybrid of the dystopian novels:
Prisons of Pleasure or Pain: Huxley’s “Brave New World” vs. Orwell’s “1984” – April 21, 2017
https://thetollonline.com/2017/04/21/prisons-of-pleasure-or-pain-huxleys-brave-new-world-vs-orwells-1984/
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Strawman argument, and either way, the invention of the guillotine became part of subsequent western evolution… minus a few.
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The stuff you speak of, is largely a function of increased accumulated knowledge. Knocking down a few buildings, even 98% of them, doesn’t destroy the knowledge of how to build. Which resides amongst the 99%. Not some dude sitting around on Wall Street collecting welfare millions from the Fed.
Look at Germany and Japan post WW2. Carpet bombed flat, yet back on top in no time.
And also, for a direct comparison of the “wealth” the poor supposedly enjoy vis-a-vis Louis XIV: Try trading your cell phone for Versailles. And your TV for lifelong servitude of the 5000 or so staff required to keep the place running. Then report back…. I want your realtor……
You need free markets for wealth to grow. Which is exactly why wealth won’t start growing again, until markets are free again. And, just as in the age of Louis XIV, that doesn’t look likely to happen, as long as our version of the Sun King’s court, run the show and live in splendor, off of robbing the rest.
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Cool, reasonable people disagreeing. I could fine-tune your rebuttal, but let’s just enjoy some peace.
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“In a “society” where 1% of the population owns 99% of all wealth, yet those 1% produce nothing of value to justify that distribution: The 99% who between them own only 1%, can literally double their wealth by disposing of the above 1%. Even if the process by which that disposal takes place, as a side effect flat out destroys 98% of everything in the country. 98% of all buildings, roads, utilities, everything. And 99% of the country will STILL be twice as wealthy as they were, before they “wised up” and got fed up…”
This reasoning is flawed. The wealthy don’t own 99% of the infrastructure. The “wealth” that the top 1% has is largely tied up in pieces of paper that have a quoted market value. People treat that as if it is as invariant as cash. It is not.
If you eliminate 1% of the population, but destroy 98% of the electric grid, water and road systems, as well as housing, do you really think the rest of us will be twice as “rich” as we are now? That’s not an experiment I would care to see.
To actually convert this supposed wealth into a usable (liquid) form it has to be sold. If they have 99% of it who is available to take the other side without cratering prices?
Folks forget how much “wealth” simply evaporated in 2008-2009. But even if the Fed keeps those asset prices elevated how are these folks ever going to realize that full value? They aren’t hurting, that’s for sure. But treating aggregate numbers extrapolated from prices set during transactions at the margin in markets as representing anything other than a theoretical value is erroneous. It’s useful for pushing an agenda and riling folks up but it is wrong. Just because someone bought 100 shares of IBM at 160 as the closing transaction does not mean every share can be sold for that amount. The Forbes 400 could not simultaneously liquidate everything they own for an amount approaching what Forbes says they are “worth.”
It’s using the flaw in the reasoning that says the US market is “worth” $22+ trillion when M1 money supply is only around $3.5 trillion. The US market cannot be “sold” for $22 trillion. There simply isn’t enough money. The larger M2 number cannot be used as the non-M1 portion of it is debt securities, which must also be sold for M1 to settle the transaction. Foreign money printing also only works to a point at the margin. US stocks are settled in dollars, so in the long run exchange rates limit what the impact can be there. Japan cannot simply double their money supply and double their buying power of US stocks.
Given the amount of assets sitting in mutual funds and ETFs, I question how the numbers were compiled to arrive at these inflammatory claims. A few years back there was a study that showed just how much of the oil and natural gas industry was owned by private and public pensions, including IRAs and the like. It was well over 40% and that was just retirement accounts.
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I’m not sure how correct any set of numbers is, what I do know is that the legal ability to lay claim to real world wealth is ultimately in the hands of a few. That goes right down to the smallest debt, you cannot say you truly own your property until you stop sharing its title. Tax as well, that is debt which appears tomorrow… as are all obligations in payment.
So I think the notion is not that of destroying the real infrastructure ( which would partly happen as consequence) , but instead the pyramid of claims where it is understood to be disconected in real world application – you end up with a shape that looks like ɪ with a wider base, enough people might just decide it needs to be rebuilt.
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As you hint at, I doubt we are quite at the point where 1% have complete control over 99% of everything yet.
Instead, the point was that, as control/ownership concentrations get ever more lopsided, the amount of outright destruction that will be acceptable for more and more people as long as the end result is a rejigging, goes through the roof.
And while 99% / 1% is quite likely a good bit of hyperbole, absent a “system” change that will inevitably lead to lots and lots of nominal “destruction” for the currently favored, things will only be moving in one direction. And not the right one.
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As soon as the bottom 65% don’t matter, those 65% may vote to take matters into their own hands.
Mike “Mish” Shedlock
We may not need to get to that point before the dam bursts! The natives are restless, and appear more than bent on keeping up the agitation at maximum. The only relief that comes to mind readily is a good, old fashion war somewhere! Are we not at that edge already?
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yeah, an army of fat people on their fat people handicapped scooters. No need for grenades to keep them at bay, just throw them burgers and fries and watch as the rear guard suffocates the fatties on the front lines, as they ride over them for those onion rings…
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The humanimals are not likely to bite the hand that they believe feeds them.
A little over 200 years from risk-taking individualists to freeloading wusses who deserve no sympathy.
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Or maybe the bottom 65% are too docile to take matters into their own hands.
College Football, Wrestlemania and Burger King is all they need to keep bouncing along as happy campers.
Trump will drop by and see them in 4 years. All is good.
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Yup. Americans are psychopathic babes in the woods.
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LMAO !!
Man, there is some real cynicism out here!
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As long as most of the 65 can be suckered into believing the reasons for their misfortune, is magically due to some coquetry of hobgoblins, rather than some of the 35%ers, stealing their stuff, they’ll happily keep supporting their overlords self proclaimed “fight” against those scary hobgoblins. Chinese, Mexicans what have you. But never the banksters and asset pump freeloaders themselves.
Never mind the latter conveniently and consistently ending up in possession of all the stolen wealth they claim scary hobgoblins are stealing (strange how that always seem to happen….). Despite virtually none of them ever having produced anything of value at all.
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“As soon as the bottom 65% don’t matter, those 65% may vote to take matters into their own hands.
Mike “Mish” Shedlock””
How do you think all that feudalism stuff started the last time around? When they weren’t taking on the other Capos’ soldiers, the Knights et al made sure the serfs gave their due to the local food chain.
That bottom 65% ??? To paraphrase Twain, if their votes mattered, there wouldn’t be elections.
That bottom 65% ??? The news that influences them comes from a small list of approved media sources which are now taking measures to ensure the real “fake news” that has been leaking into the system can no longer dominate the official “fake news” the system is designed to delivers.
That bottom 65% ??? They are increasingly debt serfs who don’t have the money to go anywhere. They can’t even afford pitchforks any more. What are they going to do … throw that iPhone at the local gentry and his flak-jacketed goons in the armoured Escalades?
That bottom 65% ??? Why do you think the noose of TSA, etc. is continually tightening to make it uncomfortable for anyone who still has the means to go anywhere? Bless their hearts that the airlines are pitching in to put themselves out of business.
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Isn’t life grand…
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problem is more (much more) than the bottom 50% is livin off big gov,fold in gov’t handouts,gov’t subsidies,gov’t contracts to keep zombie businesses on life support,gov’t entitlements,gov’t pay checks,gov’t welfare gov’t retirement checks yada yada yada,that number easily approaches 95%
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Throw in the percentage that uses government roadways to get to work (or get their products shipped) and you are right on 100%.
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When you tax the working class to feed the mentally deficient breeders, you get more mental deficients and fewer workers. A society suffering starvation has more mental deficients than workers.
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Are you saying those 65% will take us to socialism ?
Sent from my iPhone
>
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“As soon as the bottom 65% don’t matter, those 65% may vote to take matters into their own hands.”
This. There is always a tipping point. My guess is that it is when the hope is taken from the people. The hope that through work or some other means they could better their lives and have some decent outcome.
What are the chances now for young people in normal jobs to save for house, car and retirement? What are the chances for having a kid or two and get them educated and secure their lives?
Greed has killed the American Dream. 1950’s a man working could come up with enough to build a small house and take care his family as single working member of the lot. Now both need to work and there are no guarantees that they would ever have the chance for their own house.
No wonder the new generation is fed up (or is that Fed Up Yours?) with The Plan laid out for them as prisoners of Almighty Debt.
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There’s nothing more dangerous than an angry man with nothing to lose.
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The people who would traditionally have nothing to lose now do. They have a long list of entitlements that the middle class could only wish for (but are instead forced to pay for) and as such spend their time productively protesting in demands for more. Middle-class people continue to work, keeping their heads down hoping to avoid conflict. Our path is that of Venezuela, where the suffering public will only demand more entitlement, more wealth redistribution until the economy collapses into chaos.
Mish is wrong about our government not caring about the bottom 50%. They love these people. They CREATED these people. This is no accident or unforeseeable unintended consequence or collateral damage. Societal and economic failure empowers them. A nation of prosperous and self sufficient individuals would have no need for their interventions. But a crisis? Nothing is better for them, so let’s please STOP with claims of indifference towards the poor DEPENDENTS. The people that are a problem for government, the truly deplorable and despised, are those who want NOTHING to do with government programs, interventions, or entitlements. They are to be brought to heel. They are to be taxed and regulated and monitored and TAUGHT that to resist is futile.
This was the trump threat. Resist, reject, deny their authority. Now that Trump is president, he IS government so he can no longer reject it without rejecting himself, and has been absorbed by it.
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Agree.
But can your posting change anything?
I think the problem is deep and starts how we teach our children.
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Absolutely. Change will only come when we change ourselves and set an example to future generations.
Deep in the heart of this there are moral questions to be asked and answered.
No Gov can do that.
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@ wilf
Sure it does. Someone reads that and realises that what they are experiencing and have an intuition about is witnessed by others gives courage. Doesn’t matter if it just clears the mind of one person, still worth posting.
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We can only point out the truth, what hopefully becomes obvious after proper illumination. Force cannot be part of a sustainable society. If people simply refuse to see, only the Brutish nature of reality can remove the scales from their eyes, not you or me.
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The 50% figure of people without an extra $500 seems incredible, but I think it is true. I am constantly amazed at how many people I meet who are in that situation. However, for 99% of that 50% the problem is not bad luck or lack of opportunity; it is incredibly bad life choices.
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The bottom 50%may be poor, but they are not desperate because even with Trump there is little fear that entitlements will fade. The Obamacare debates shows this to be true. I would contend that it is the middle class that is desperate as they have everything to lose and are threatened daily (if they choose to pay attention). Granted, they are far less apt to act up like the dependent poor do, but I believe they suffer in silence…. well, not all of them.
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Yes!
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“is not bad luck or lack of opportunity; it is incredibly bad life choices”
I would guess that in more than 90% of the cases it is specifically about not having opportunities. Or you might argue that those born into wealth would come up with same amount of wealth starting from scratch?
Without their parents putting them through elite schools and leveling the road all the way in front of them?
I think delusion is part of the problem.
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yeah, like the 2 people on a previous post whose kids did that naval nuclear thing… no opportunities in the U.S.A. – my ass!
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does 2 opportunities logically extrapolate to 10 or 20 million opportunities?
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I commend you for trying to talk sense into the right wing lunatics here, and I offer my advice that you’re wasting your time.
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It’s about realizing early to open as many windows for yourself as possible and to burn few bridges along the way.
Walkin around with your pants down below your ass and thinking its cute to talk like an idiot takes away your right to complain about lack of opportunities.
I’m a public school middle class kid – and that’s being generous.
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“does 2 opportunities logically extrapolate to 10 or 20 million opportunities?”
Numerous opportunities are created every day. Any opportunity can be a stepping stone to future financial success. What did all the big name movie stars do at one time, to earn money? None of the hosts on Shark Tank started out filthy rich. A lot of the successful contestants on the show, struggled before that opportunity, but they hadn’t given up. The failed contestants continued to push ahead with their dream. some will fail, but from that may come an idea that will be successful.
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You are right, awful choices, I do volunteer work with the courts, the issue is almost always, single parenthood, and drugs, always paid for by tax dollars.
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I am an immigrant without resources making it into the upper 2% of USA.
Our son has no resources because of choices like two divorces and a long vacation to become a writer plus a general disregard of the law.
I think this country is very rich and is wasting that wealth because it can do that.
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People tend to have to actually suffer shortage or difficulty before being able to properly handle prosperity. That could be economic, or emotional and so on, often our lives are partly self-shaped by our own experiences. The idea that a society can reach orbit by consuming its wealth is obviously a fallacy.. just maybe, some will get a good enough view along the way to be able to structure some kind of feasible path, either for themselves or presented as contribution or example to the rest.
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I made a study of many countries and found that the upper 5% control more than 50% of the wealth of the countries I studied (including Russia).
I am a citizen of the EU and as such can go to many countries.
With all its faults the USA is the best choice.
But yes, we have problems.
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Yep, what we see in the various geopolitical games including acts of war are simply the self-serving actions of different oligarchies which may or may not serve the best interests of the propagandized citizenries they manipulate. Same as it ever was…
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“As soon as the bottom 65% don’t matter, those 65% may vote to take matters into their own hands.”
When is the question? In another 50 years?
The Fed has thrown savers, pensioners and prudent people under the bus in 2008 and has kept them since then for almost a decade and still there is no question asked. Has anyone at the Fed been thrown under the bus for the train wreck in 2008. No.
If people don’t want to wake up what do you do?
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Of course not. But the members of the Fed did nothing illegal. The folks doing the illegal stuff were bankers creating fraudulent MBSs and selling them to working folks pensions.
We can’t even recognize who the true thieves are. Which is why revolution doesn’t work. The innocent get hanged, the thieves laugh and regular folks wonder why nothing gets better.
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“We can’t even recognize who the true thieves are.” Sure we can if we look hard enough. This just released documentary details the problem in great detail. A bit too conspiratorial for me at the start, but brilliantly and meticulously documented within:
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All it’s going to take is one big disaster like an 8 point quake in California and that’s all she wrote. Nobody has quake insurance where the average homeowner would be obligated to pay for the first $80,000 in damages out of pocket. 50% are living hand to mouth. How are they going to come up with $60 grand? Do you think Trump would come through for California when he got trounced by in the land of the fruits and the nuts?
I’m telling you. We’re at the tipping point when it comes to debt. One big disaster and down she goes!!!
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correct anything above an 8 would be horrific; but… the odds of a 8 are minuscule.
The odds of a 7 within next 5-7 years in SF area are surprisingly high. ( people have no idea how likely a 7 is ) A 7 won’t nuke everything, but it will cause disruption.
Buildings built in last 30 years can withstand a 7 no problems. Nearly all older commercial buildings have been retrofitted to not collapse in a 7.
been my business for some 35 years – I know this subject very well.
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They said an 8 wasn’t possible in Indonesia either.
No offense, Vooch. But I don’t pay attention to experts anymore. I’ve been disappointed too many times.
Several faults in California are certainly capable of 8’s or above. Lots of pressure has built up over the years and the State is way overdue.
A 7.5 could bring down a lot of buildings in Ca, retrofitting or no retrofitting. And I would not want to be in a high-rise, regardless of how safe the “experts” claim I would be.
My broker was in business for 35 years when 2008 happened. Took him totally by surprise.
Just sayin’.
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Why was MetLife doing the survey cued by Mish?
I think the insurance companies are/have been taking a long hard look at just exactly what in the Sam hell they are supposedly insuring. They’re getting tapped pretty hard by ongoing ZIRP as it is. What happens to them if something actually happens? Who’s paying premiums when they can’t pay the rent?
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“The Fed does not give a damn about the bottom half of the economy even though it spouts continual lies about “income inequality.” Mish
To which I would add, the Liberal Interventionist Democrats and War Party Republicans. The socialistic Democrats despite their (fraudulent) rhetoric are as described in George Orwell’s Animal Farm. Witness Obama’s version of equal pay, $400,000 per hour for Wall Street Obamacare speeches. At $15/hour would take several hundred thousand hours after taxes to get there.
The Fed is by charter a consortium of banks and its core responsibility is the financial health of member banks and monetizing and financing USA.gov deficits. Fed bankers sounding like Fidel Castro or the Soviet Politburo and spouting Marxist rhetoric about income equality is a strange Orwellian development, for which the Obama administration no doubt gets some credit. Ultimately the USA Congress is to blame, as they created the Fed and expanded its powers to include consumer financial protection, inflation, unemployment rates, etc. No doubt convenient for Congress to use the Fed as a scapegoat to divert blame.
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“The Fed does not give a damn about the bottom half of the economy even though it spouts continual lies about ‘income inequality.’”
Which is because, in reality, their mission is to serve the banking system first, everyone and everything else second, all the while justifying their actions with a convenient economic theory which has proven again and again to be complete garbage.
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Top 10 US Cities for homelessness.
Look at CA cities.
What did Obama actually do to improve that situation?
http://www.cheatsheet.com/culture/cities-with-the-most-homeless-people.html/?a=viewall
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Meanwhile he has been living it up with Branson and giving well paid speeches (?). Nothing changed but change was the mandate.
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Trump is Obamas baby, the result of the previous 8 years.
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The economic bottom 50% are also mostly the bottom 50% in the IQ distribution. It’s even worse than a historically normal distribution would suggest, because of the unique US demographics.
What kind of takeover would you expect from people with average IQ of 85?
At best they will serve as useful idiots. The real “revolutionaries” are in the top 50%. For ex. the Berniebots – the future elite. Great, right?
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It’s always that way. Some despot uses the masses.
By the time people wake up its too late and one sh-t situation is swapped for another.
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It’s usually like this: https://i.imgtc.com/Ui5EGnF.jpg
With lots of damage done in the process.
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All good points, but beyond the Fed’s ability or very difficult so the Fed ignores them
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Shhh… this is a blame it all on the Fed party. It’s dangerous to talk about the real criminals.
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Don’t people use credit cards to get them over gamblers’ ruin situations now? Instead of direct savings?
Or rely on what amounts to being the global village to support them through hard times?
I find it hard to come up with a rational reason they are doing it wrong. Just, “I don’t respect it and therefore don’t want to do it that way, myself.”
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“Don’t people use credit cards to get them over gamblers’ ruin situations now? Instead of direct savings?”
Exactly. That’s one of the major contributing factors to the graphed data in this column:
http://www.oftwominds.com/blogmar17/eighties3-17.html
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Probably some truth to that.
As a note, I’ve always had suspicions about these 1%-own-it-all stats. They fit too well with a particular mind set. Like, the mind set comes first, and now, viola, here are some stats to prove it!
How are these status generated? Last I looked at “ownership”, the whole concept got slippery real fast. For instance, when an entity takes, say, 20% of company income after the first couple big-takers (vendors and employees) take their cut, wouldn’t you be inclined to call that entity an owner of sorts? And how ’bout those first two big-takers? Employees generally have the most control over any company. Half of “ownership” is control, isn’t it?
Too, a lot of misunderstandings about the world seem based on statistics that are misleading, at best. An example might be curves showing distribution by “income”. They all look nice and exponential with the peak at the low end. That’s fine and mathematically sound. But they all have zero instances of negative “incomes”! How realistic is that?
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The question remains is anything too bib to fail, I think not. With the markets sporting a glow from all-time record highs that are being made week after week it might be a good time to revisit the concept of irrational exuberance. Since 2008 all growth has been built on a mountain of debt.
Those of us who have doubted and repeatedly predicted the collapse of this so-called recovery remain wrong because we have underestimated both the breadth and size of the global intervention of central banks and governments. Nobody in their right mind would have ever anticipated the sheer magnitude and scope of what has become a worldwide phenomenon. The article below questions when the burden of global debt will cause Atlas to shrug.
http://brucewilds.blogspot.com/2017/03/when-will-atlas-shrug-burden-of-global.html
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The Federal Reserve has noting to do with quality of life, only quantity of money and supply of credit. The Fed can no more improve the lot of the bottom 50%, than it can directly prevent drug abuse or abortion rates. All that the Fed has ever done is encourage poor marginal investments with low hurdle/interest rates or make sure only the best marginal investments make it past a high hurdle rate – it impacts the economy at the margin, not the core.
I look at it this way. The Fed has been lowering the costs in the economy for everyone by pursuing ZIRP ad QE. A 20 trillion debt burden at 4% rates costs 800 bilion a year – at 1% it os “only” 200 billion. By monetizing US Government debt, the Fed has lowered costs to the US economy by 600 billion A YEAR, for a total of 4.2 trillion dollars over the last 7 years.
That is its only saving grace – enabling successive libtard socialist governments in the US to fund the welfare economy that it cannot afford.
The hard solution is to lower all benefits so that people have a stronger motivation to both work and save. The Fed could encourage saving by setting a rate of, say, 3%, which would be consistent with todays inflation rate.
The goverment has some control over the spending of scarce tax dollars in the economy that it hasn’t already pledged to non-discretionary welfare spending, but it chooses to lower US living standards by spending 750 billion a year on war, whilst allowing predatory pricing in health provision and education. The government sponsors debt creation for health and learning. It also sponsors poor health care and poor education by allowing politically correct antifa campuses that produce, again at the margin, students that cannot create value to society.
The choice made by people to remain unprepared for their financial needs is a function of reward for no effort via benefits combine with no reward for saving via lower interest rates.
Trump was elected to end drug cartels predatory pricing, to motivate american unversities and companies to substitute american know-how and people into all aspects of the value chains that make up the imports of goofs AND to reduce spending on the military on pointless wars in places that most people couldn’t find on a map.
So far, he has either flipped or been stymied and is fast losing any relevance he might have had to solving some deep rooted issues. As such, he has contributed to the lack of faith people have for politicians. Nobody has faith in the gnomes in the Fed to do anything worthwhile that might affect QUALITY of life for the bottom 80% of people. The top 20% are laughing all the way to the (bailed out) banks.
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“So far, he has either flipped or been stymied and is fast losing any relevance he might have had to solving some deep rooted issues.”
Simply proving once again the validity of the 2014 Princeton University study’s statistical proof of the US as oligarchy.
Here’s the “Change You Can Believe In” candidate v2.0, a speed bump for those actually in control as always. From the news today:
Congress reaches spending deal, lowering odds of government shutdown
The $1 trillion-plus spending bill will allocate $1.5 billion for additional technology and infrastructure on the border, but includes language that explicitly states those funds cannot go to the construction of a wall. Lawmakers also rejected the president’s demand for $18 billion in non-defense spending cuts, increasing funds for the National Institutes for Health (NIH) by $2 billion for cancer research. Democrats held off the White House’s demand to cut the Environmental Protection Agency by a third as well, with that agency getting just a 1 percent trim off its budget.
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Is is possible to find out the rate of change of this segment of the population? e.g. Was 25% 10 years ago?
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The extremities go first as the organism dies.
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The bank continues to confiscate resources from the bottom 50%, moving them ever backward. Not good. Printing is confiscation.
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If you want the bottom 50% (or 65%) to vote, you should legislate compulsory voting, like Australia, Singapore etc. No need to destroy people’s lives in order to get them to vote.
Though, are you sure that this group is not Voting? And if they did vote, who would they vote For?
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“Though the mills of God grind slowly; Yet they grind exceeding small;
Though with patience He stands waiting, With exactness grinds He all.”
– Henry Wadsworth Longfellow
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Since the beginning of time man has scratched day to day for survival. Working the land or out hunting food. Very little stored up with starvation just one bad turn away. Why is it any different today, paycheck to paycheck. Two of my favorite sayings sum it up.
The more man changes the more he stays the same.
Whether you are a lion or a gazelle, you must run to survive.
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Only a blind idiot would fail to recognize the profound, skillfully engineered changes that have been rammed up the butt of the middle class in this country. Unfortunately, over 100 years ago, the middle class was targeted for destruction by a collective of oligarchs, and the plans executed by their highly paid lobbyist whores who masquerade as “elected officials”. Some say the ZIONISTS control our government and military and media and educational and health systems, etc. Regardless of who is in control, it is plainly obvious that it is NOT the middle class.
Read and weep. WE WERE WARNED. WE WERE INFORMED. WE FAILED.
“If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered…. I believe that banking institutions are more dangerous to our liberties than standing armies…. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.” Thomas Jefferson
“Some people think that the Federal Reserve Banks of these United States are Government institutions. They are PRIVATE MONOPOLIES which prey upon the people of these United States for the benefit of themselves and their foreign customers; foreign and domestic speculators and swindlers; and rich and predatory money lenders. In that dark crew of financial pirates there are those who would cut a man’s throat to get a dollar out of his pocket; there are those who send money into states to buy votes to control our legislatures; there are those who maintain International propaganda for the purpose of deceiving us into granting of new concessions which will permit them to cover up their past misdeeds and set again in motion their gigantic train of crime.”
Congressman Louis T. McFadden – served as CHAIRMAN of the United States House Committee on Banking and Currency during the Sixty-sixth through Seventy-first Congresses, or 1920-1931
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The bottom 50% matter to me. Can I claim them as dependents on my tax return now?
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That’s me, my wife, and 150 million dependents. Damn, I’m a hero!
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In fact, what you have lived to witness is a slow motion BOLSHEVIK REVOLUTION in the USSA.
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I don’t know why people have such an apparently difficult time abandoning their delusion of being “in control” via their vote. They don’t like the reality of their effective powerlessness? Instead, they prefer the illusion of control.
So long as you want something that doesn’t affect the status quo distribution and flow of trillions of dollars of your money and new debt accrued on YOUR tab, the ONLY thing the oligarchy cares about, you might actually get your way on that issue. Anything else, forget it. This was statistically proven in spades the groundbreaking 2014 Princeton University study.
This first appeared in shorter form in The American Conservative:
Plumbing the Depths
How the Gears Turn
March 9, 2008
http://www.fredoneverything.net/TACDemocracy.shtml
Excerpt, just the first four points of eleven:
Common delusions notwithstanding, the United States, I submit, is not a democracy—by which is meant a system in which the will of the people prevails. Rather it is a curious mechanism artfully designed to circumvent the will of the people while appearing to be democratic. Several mechanisms accomplish this.
First, we have two identical parties which, when elected, do very much the same things. Thus the election determines not policy but only the division of spoils. Nothing really changes. The Democrats will never seriously reduce military spending, nor the Republicans, entitlements.
Second, the two parties determine on which questions we are allowed to vote. They simply refuse to engage the questions that matter most to many people. If you are against affirmative action, for whom do you vote? If you regard the schools as abominations? If you want to end the president’s hobbyist wars?
Third, there is the effect of large jurisdictions. Suppose that you lived in a very small (and independent) school district and didn’t like the curriculum. You could buttonhole the head of the school board, whom you would probably know, and say, “Look, Jack, I really think….” He would listen.
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Crummy schools, high federal, state and local taxes, and devastating healthcare prices (5 pct of GDP IN 1970, 15 pct now) have drained paychecks. Employers have to pay total compensation, wages are just part of that. Blaming the Fed just distracts from the real problems.
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Probably the best, and most important, column Mish has ever written.
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Reblogged this on The Most Revolutionary Act and commented:
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Despite all the corporate rhetoric about economic recovery, half of all Americans are one paycheck away from homelessness.
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For all but the most recent part of the history of civilization a population was only an asset to the state for two things, waging war or participating in taxable endeavors, mostly agriculture. Today the non-productive are valued for their votes and little else.
When their votes no longer count and the non-productive are recognized as a liability, not an asset, things will get very interesting.
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Reblogged this on auntyuta.
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Ask not what the Billionaire & his Buddies can do for you…
Ask what you can do for the Billionaire & his Buddies.
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Now I been lookin’ for a job but it’s hard to find
Down here it’s just winners and losers and don’t get caught on the wrong side of that line
Well I’m tired of comin’ out on the losin’ end
So honey last night I met this guy and I’m gonna do a little favor for him
Well I guess everything dies baby that’s a fact
But maybe everything that dies someday comes back
Put your hair up nice and set up pretty
and meet me tonight in Atlantic City
Meet me tonight in Atlantic City
Meet me tonight in Atlantic City
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“As soon as the bottom 65% don’t matter, those 65% may vote to take matters into their own hands.”
Precisely. This is why the bottom 50% do, in fact, matter – they can still vote.
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