Is it just me, or are the signs of consumer collapse as clear as a Lowes parking lot on a Saturday afternoon? Sometimes I wonder if I’m just seeing the world through my pessimistic lens, skewing my point of view. My daily commute through West Philadelphia is not very enlightening, as the squalor, filth and lack of legal commerce remain consistent from year to year. This community is sustained by taxpayer subsidized low income housing, taxpayer subsidized food stamps, welfare payments, and illegal drug dealing. The dependency attitude, lifestyles of slothfulness and total lack of commerce has remained constant for decades in West Philly. It is on the weekends, cruising around a once thriving suburbia, where you perceive the persistent deterioration and decay of our debt fixated consumer spending based society.
The last two weekends I’ve needed to travel the highways of Montgomery County, PA going to a family party and purchasing a garbage disposal for my sink at my local Lowes store. Montgomery County is the typical white upper middle class suburb, with tracts of McMansions dotting the landscape. The population of 800,000 is spread over a 500 square mile area. Over 81% of the population is white, with the 9% black population confined to the urban enclaves of Norristown and Pottstown.
The median age is 38 and the median household income is $75,000, 50% above the national average. The employers are well diversified with an even distribution between education, health care, manufacturing, retail, professional services, finance and real estate. The median home price is $300,000, also 50% above the national average. The county leans Democrat, with Obama winning 60% of the vote in 2008. The 300,000 households were occupied by college educated white collar professionals. From a strictly demographic standpoint, Montgomery County appears to be a prosperous flourishing community where the residents are living lives of relative affluence. But, if you look closer and connect the dots, you see fissures in this façade of affluence that spread more expansively by the day. The cheap oil based, automobile dependent, mall centric, suburban sprawl, sanctuary of consumerism lifestyle is showing distinct signs of erosion. The clues are there for all to see and portend a bleak future for those mentally trapped in the delusions of a debt dependent suburban oasis of retail outlets, chain restaurants, office parks and enclaves of cookie cutter McMansions. An unsustainable paradigm can’t be sustained.
The first weekend had me driving along Ridge Pike, from Collegeville to Pottstown. Ridge Pike is a meandering two lane road that extends from Philadelphia, winds through Conshohocken, Plymouth Meeting, Norristown, past Ursinus College in Collegeville, to the farthest reaches of Montgomery County, at least 50 miles in length. It served as a main artery prior to the introduction of the interstates and superhighways that now connect the larger cities in eastern PA. Except for morning and evening rush hours, this road is fairly sedate. Like many primary routes in suburbia, the landscape is engulfed by strip malls, gas stations, automobile dealerships, office buildings, fast food joints, once thriving manufacturing facilities sitting vacant and older homes that preceded the proliferation of cookie cutter communities that now dominate what was once farmland.
Telltale Signs
I should probably be keeping my eyes on the road, but I can’t help but notice the telltale signs of an economic system gone haywire. As you drive along, the number of For Sale signs in front of homes stands out. When you consider how bad the housing market has been, the 40% decline in national home prices since 2007, the 30% of home dwellers underwater on their mortgage, and declining household income, you realize how desperate a home seller must be to try and unload a home in this market. The reality of the number of For Sale signs does not match the rhetoric coming from the NAR, government mouthpieces, CNBC pundits, and other housing recovery shills about record low inventory and home price increases.
The Federal Reserve/Wall Street/U.S. Treasury charade of foreclosure delaying tactics and selling thousands of properties in bulk to their crony capitalist buddies at a discount is designed to misinform the public. My local paper lists foreclosures in the community every Monday morning. In 2009 it would extend for four full pages. Today, it still extends four full pages. The fact that Wall Street bankers have criminally forged mortgage documents, people are living in houses for two years without making mortgage payments, and the Federal Government backing 97% of all mortgages while encouraging 3.5% down financing does not constitute a true housing recovery. Show me the housing recovery in these charts.
Existing home sales are at 1998 levels, with 45 million more people living in the country today.
New single family homes under construction are below levels in 1969, when there were 112 million less people in the country.
Another observation that can be made as you cruise through this suburban mecca of malaise is the overall decay of the infrastructure, appearances and disinterest or inability to maintain properties. The roadways are potholed with fading traffic lines, utility poles leaning and rotting, and signage corroding and antiquated. Houses are missing roof tiles, siding is cracked, gutters astray, porches sagging, windows cracked, a paint brush hasn’t been utilized in decades, and yards are inundated with debris and weeds. Not every house looks this way, but far more than you would think when viewing the overall demographics for Montgomery County. You wonder how many number among the 10 million vacant houses in the country today. The number of dilapidated run down properties paints a picture of the silent, barely perceptible Depression that grips the country today. With such little sense of community in the suburbs, most people don’t even know their neighbors. With the electronic transfer of food stamps, unemployment compensation, and other welfare benefits you would never know that your neighbor is unemployed and hasn’t made the mortgage payment on his house in 30 months. The corporate fascist ruling plutocracy uses their propaganda mouthpieces in the mainstream corporate media and government agency drones to misinform and obscure the truth, but the data and anecdotal observational evidence reveal the true nature of our societal implosion.
A report by the Census Bureau this past week inadvertently reveals data that confirms my observations on the roadways of my suburban existence. Annual household income fell in 2011 for the fourth straight year, to an inflation-adjusted $50,054. The median income — meaning half earned more, half less — now stands 8.9% lower than the all-time peak of $54,932 in 1999. It is far worse than even that dreadful result. Real median household income is lower than it was in 1989. When you understand that real household income hasn’t risen in 23 years, you can connect the dots with the decay and deterioration of properties in suburbia. A vast swath of Americans cannot afford to maintain their residences. If the choice is feeding your kids and keeping the heat on versus repairing the porch, replacing the windows or getting a new roof, the only option is survival.
All races have seen their income fall, with educational achievement reflected in the much higher incomes of Whites and Asians. It is interesting to note that after a 45 year War on Poverty the median household income for black families is only up 19% since 1968.
Now for the really bad news. Any critical thinking person should realize the Federal Government has been systematically under-reporting inflation since the early 1980’s in an effort to obscure the fact they are debasing the currency and methodically destroying the lives of middle class Americans. If inflation was calculated exactly as it was in 1980, the GDP figures would be substantially lower and inflation would be reported 5% higher than it is today. Faking the numbers does not change reality, only the perception of reality. Calculating real median household income with the true level of inflation exposes the true picture for middle class America. Real median household income is lower than it was in 1970, just prior to Nixon closing the gold window and unleashing the full fury of a Federal Reserve able to print fiat currency and politicians to promise the earth, moon and the sun to voters. With incomes not rising over the last four decades is it any wonder many of our 115 million households slowly rot and decay from within like an old diseased oak tree. The slightest gust of wind can lead to disaster.
Eliminating the last remnants of fiscal discipline on bankers and politicians in 1971 accomplished the desired result of enriching the top 0.1% while leaving the bottom 90% in debt and desolation. The Wall Street debt peddlers, Military Industrial arms dealers, and job destroying corporate goliaths have reaped the benefits of financialization (money printing) while shoveling the costs, their gambling losses, trillions of consumer debt, and relentless inflation upon the working tax paying middle class. The creation of the Federal Reserve and implementation of the individual income tax in 1913, along with leaving the gold standard has rewarded the cabal of private banking interests who have captured our economic and political systems with obscene levels of wealth, while senior citizens are left with no interest earnings ($400 billion per year has been absconded from savers and doled out to bankers since 2008 by Ben Bernanke) and the middle class has gone decades seeing their earnings stagnate and their purchasing power fall precipitously.
The facts exposed in the chart above didn’t happen by accident. The system has been rigged by those in power to enrich them, while impoverishing the masses. When you gain control over the issuance of currency, issuance of debt, tax system, political system and legal apparatus, you’ve essentially hijacked the country and can funnel all the benefits to yourself and costs to the math challenged, government educated, brainwashed dupes, known as the masses. But there is a problem for the 0.1%. Their sociopathic personalities never allow them to stop plundering and preying upon the sheep. They have left nothing but carcasses of the once proud hard working middle class across the country side. There are only so many Lear jets, estates in the Hamptons, Jaguars, and Rolexes the 0.1% can buy. There are only 152,000 of them. Their sociopathic looting and pillaging of the national wealth has destroyed the host. When 90% of the population can barely subsist, collapse and revolution beckon.
Extend, Pretend & Depend
As I drove further along Ridge Pike we passed the endless monuments to our spiral into the depths of materialism, consumerism, and the illusion that goods purchased on credit represented true wealth. Mile after mile of strip malls, restaurants, gas stations, and office buildings rolled by my window. Anyone who lives in the suburbs knows what I’m talking about. You can’t travel three miles in any direction without passing a Dunkin Donuts, KFC, McDonalds, Subway, 7-11, Dairy Queen, Supercuts, Jiffy Lube or Exxon Station. The proliferation of office parks to accommodate the millions of paper pushers that make our service economy hum has been unprecedented in human history. Never have so many done so little in so many places. Everyone knows what a standard American strip mall consists of – a pizza place, a Chinese takeout, beer store, a tanning, salon, a weight loss center, a nail salon, a Curves, karate studio, Gamestop, Radioshack, Dollar Store, H&R Block, and a debt counseling service. They are a reflection of who we’ve become – an obese drunken species with excessive narcissistic tendencies that prefers to play video games while texting on our iGadgets as our debt financed lifestyles ultimately require professional financial assistance.
What you can’t ignore today is the number of vacant storefronts in these strip malls and the overwhelming number of SPACE AVAILABLE, FOR LEASE, and FOR RENT signs that proliferate in front of these dying testaments to an unsustainable economic system based upon debt fueled consumer spending and infinite growth assumptions. The booming sign manufacturer is surely based in China. The officially reported national vacancy rates of 11% are already at record highs, but anyone with two eyes knows these self-reported numbers are a fraud. Vacancy rates based on my observations are closer to 30%. This is part of the extend and pretend strategy that has been implemented by Ben Bernanke, Tim Geithner, the FASB, and the Wall Street banking cabal. The fraud and false storyline of a commercial real estate recovery is evident to anyone willing to think critically. The incriminating data is provided by the Federal Reserve in their Quarterly Delinquency Report.
The last commercial real estate crisis occurred in 1991. Mall vacancy rates were at levels consistent with today.
The current reported office vacancy rates of 17.5% are only slightly below the 19% levels of 1991.
As reported by the Federal Reserve, delinquency rates on commercial real estate loans in 1991 were 12%, leading to major losses among the banks that made those imprudent loans. Amazingly, after the greatest financial collapse in history, delinquency rates on commercial loans supposedly peaked at 8.8% in the 2nd quarter of 2010 and have now miraculously plummeted to pre-collapse levels of 4.9%. This is while residential loan delinquencies have resumed their upward trajectory, the number of employed Americans has fallen by 414,000 in the last two months, 9 million Americans have left the labor force since 2008, and vacancy rates are at or near all-time highs. This doesn’t pass the smell test. The Federal Reserve, owned and controlled by the Wall Street, instructed these banks to extend all commercial real estate loans, pretend they will be paid, and value them on their books at 100% of the original loan amount. Real estate developers pretend they are collecting rent from non-existent tenants, Wall Street banks pretend they are being paid by the developers, and their highly compensated public accounting firm pretends the loans aren’t really delinquent. Again, the purpose of this scam is to shield the Wall Street bankers from accepting the losses from their reckless behavior. Ben rewards them with risk free income on their deposits, propped up by mark to fantasy accounting, while they reward themselves with billions in bonuses for a job well done. The master plan requires an eventual real recovery that isn’t going to happen. Press releases and fake data do not change the reality on the ground.
I have two strip malls within three miles of my house that opened in 1990. When I moved to the area in 1995, they were 100% occupied and a vital part of the community. The closest center has since lost its Genuardi grocery store, Sears Hardware, Blockbuster, Donatos, Sears Optical, Hollywood Tans, hair salon, pizza pub and a local book store. It is essentially a ghost mall, with two banks, a couple chain restaurants and empty parking spaces. The other strip mall lost its grocery store anchor and sporting goods store. This has happened in an outwardly prosperous community. The reality is the apparent prosperity is a sham. The entire tottering edifice of housing, autos, and retail has been sustained by ever increasing levels of debt for the last thirty years and the American consumer has hit the wall. From 1950 through the early 1980s, when the working middle class saw their standard of living rise, personal consumption expenditures accounted for between 60% and 65% of GDP. Over the last thirty years consumption has relentlessly grown as a percentage of GDP to its current level of 71%, higher than before the 2008 collapse.
If the consumption had been driven by wage increases, then this trend would not have been a problem. But, we already know real median household income is lower than it was in 1970. The thirty years of delusion were financed with debt – peddled, hawked, marketed, and pushed by the drug dealers on Wall Street. The American people got hooked on debt and still have not kicked the habit. The decline in household debt since 2008 is solely due to the Wall Street banks writing off $800 billion of mortgage, credit card, and auto loan debt and transferring the cost to the already drowning American taxpayer.
The powers that be are desperately attempting to keep this unsustainable, dysfunctional debt choked scheme from disintegrating by doling out more subprime auto debt, subprime student loan debt, low down payment mortgages, and good old credit card debt. It won’t work. The consumer is tapped out. Last week’s horrific retail sales report for August confirmed this fact. Declining household income and rising costs for energy, food, clothing, tuition, taxes, health insurance, and the other things needed to survive in the real world, have broken the spirit of Middle America. The protracted implosion of our consumer society has only just begun. There are thousands of retail outlets to be closed, hundreds of thousands of jobs to be eliminated, thousands of malls to be demolished, and billions of loan losses to be incurred by the criminal Wall Street banks.
The Faces of Failure & Futility
My fourteen years working in key positions for big box retailer IKEA has made me particularly observant of the hubris and foolishness of the big chain stores that dominate the retail landscape. There are 1.1 million retail establishments in the United States, but the top 25 mega-store national chains account for 25% of all the retail sales in the country. The top 100 retailers operate 243,000 stores and account for approximately $1.6 trillion in sales, or 36% of all the retail sales in the country. Their misconceived strategic plans assumed 5% same store growth for eternity, economic growth of 3% per year for eternity, a rising market share, and ignorance of the possible plans of their competitors. They believed they could saturate a market without over cannibalizing their existing stores. Wal-Mart, Target, Best Buy, Home Depot and Lowes have all hit the limits of profitable expansion. Each incremental store in a market results in lower profits.
My trip to my local Lowes last weekend gave me a glimpse into a future of failure and futility. Until 2009, I had four choices of Lowes within 15 miles of my house. There was a store 8 miles east, 12 miles west, 15 miles north, and 15 miles south of my house. In an act of supreme hubris, Lowes opened a store smack in the middle of these four stores, four miles from my house. The Hatfield store opened in early 2009 and I wrote an article detailing how Lowes was about to ruin their profitability in Montgomery County. It just so happens that I meet a couple of my old real estate buddies from IKEA at a local pub every few months. In 2009 one of them had a real estate position with Lowes and we had a spirited discussion about the prospects for the Lowes Hatfield store. He assured me it would be a huge success. I insisted it would be a dud and would crush the profitability of the market by cannibalizing the other four stores. We met at that same pub a few months ago. Lowes had laid him off and he admitted to me the Hatfield store was a disaster.
I pulled into the Lowes parking lot at 11:30 am on a Saturday. Big Box retailers do 50% of their business on the weekend. The busiest time frame is from 11:00 am to 2:00 pm on Saturday. Big box retailers build enough parking spots to handle this peak period. The 120,000 square feet Hatfield Lowes has approximately 1,000 parking spaces. I pulled into the spot closest to the entrance during their supposed peak period. There were about 70 cars in the parking lot, with most probably owned by Lowes workers. It is a pleasure to shop in this store, with wide open aisles, and an employee to customer ratio of four to one. The store has 14 checkout lanes and at peak period on a Saturday, there was ONE checkout lane open, with no lines. This is a corporate profit disaster in the making, but the human tragedy far overrides the declining profits of this mega-retailer.
As you walk around this museum of tools and toilets you notice the looks on the faces of the workers. These aren’t the tattooed, face pierced freaks you find in many retail establishments these days. They are my neighbors. They are the beaten down middle class. They are the middle aged professionals who got cast aside by the mega-corporations in the name of efficiency, outsourcing, right sizing, stock buybacks, and executive stock options. The irony of this situation is lost on those who have gutted the American middle class. When you look into the eyes of these people, you see sadness, confusion and embarrassment. They know they can do more. They want to do more. They know they’ve been screwed, but they aren’t sure who to blame. They were once the very customers propelling Lowes’ growth, buying new kitchens, appliances, and power tools. Now they can’t afford a can of paint on their $10 per hour, no benefit retail careers. As depressing as this portrait appears, it is about to get worse.
This Lowes will be shut down and boarded up within the next two years. The parking lot will become a weed infested eyesore occupied by 14 year old skateboarders. One hundred and fifty already down on their luck neighbors will lose their jobs, the township will have a gaping hole in their tax revenue, and the CEO of Lowes will receive a $50 million bonus for his foresight in announcing the closing of 100 stores that he had opened five years before. This exact scenario will play out across suburbia, as our unsustainable system comes undone. Our future path will parallel the course of the labor participation rate. Just as the 9 million Americans who have “left” the labor force since 2008 did not willfully make that choice, the debt burdened American consumer will be dragged kicking and screaming into the new reality of a dramatically reduced standard of living.
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Connecting the dots between my anecdotal observations of suburbia and a critical review of the true non-manipulated data bestows me with a not optimistic outlook for the coming decade. Is what I’m seeing just the view of a pessimist, or are you seeing the same thing?
A few powerful men have hijacked our economic, financial and political structure. They aren’t socialists or capitalists. They’re criminals. They created the culture of materialism, greed and debt, sustained by prodigious levels of media propaganda. Our culture has been led to believe that debt financed consumption over morality and justice is the path to success. In reality, we’ve condemned ourselves to a slow painful death spiral of debasement and despair.
“A culture that does not grasp the vital interplay between morality and power, which mistakes management techniques for wisdom, and fails to understand that the measure of a civilization is its compassion, not its speed or ability to consume, condemns itself to death.” – Chris Hedges
Fiat Money Is Immoral
By Richard Russell09/12/2012
The following is an excerpt from Richard Russell’s Dow Theory Letters
“One Nation — SUBSIDIZED — How Big Government Underwrites Your Life.” From the cover of this week’s Time magazine.
Russell goes moral — I may work my whole life and make an after-tax total of five million dollars. The Fed, with nobody working, can “create” 100 billion dollars out of thin air in a matter of a few seconds. To me, this is absolutely immoral. Furthermore, the Fed wants inflation to continue at 2% a year. Again, I maintain that this is immoral. It’s wiping out the middle class over time. I have a GI life insurance policy that was worth $10,000 when I took it out in 1945. At that time, the policy looked like big money. I scrimped and saved to buy and pay off that policy. What’s the policy worth today, after years of compounded 2% inflation? Not much — talk about legal robbery!
A few American generations had a party after World War II. They borrowed and lived on a diet of steady inflation for over fifty years — until the present. Almost everything they did was inflated and subsidized by the government. Two or three generations voted themselves the good, inflated, subsidized life — and did they worry? Hell no, their kids and grandkids could pay for the fun later.
Now, payback time has come for their kids and grandkids. And the nation is close to suffering a nervous, debt-filled breakdown.
How will we ever pay off the debts the postwar generations ran up? Hey, no problem, we’ll just print the money.
My take on this. The fiat money we print is immoral money. Nobody worked for it. I’m saying that the nation can’t bail itself out with immoral money. It won’t work. The Founding Fathers warned against fiat money, money that was backed by nothing, money that nobody worked for. If the Founding Fathers could see what has happened to their republic, they would roll over in their graves. “We give you a republic — if you can keep it,” said Ben Franklin.
I am saying that we haven’t kept it. Franklin’s warning proved prophetic. We haven’t kept the republic that our forefathers created for us. Some gave their lives for our republic, all staked their sacred honor for it, and in our greed and stupidity we have failed them.
I’m saying that the US can’t keep its current system if we depend on immoral money. I’m saying that we can’t print ourselves out of this mess. The Fed can print itself silly — it won’t work. The post World War II generations had their long, subsidized party. Now I’m afraid that we’re fated to take the pain. Unless, of course, we can print ourselves out of this disaster with worthless, immoral fiat money — money that nobody worked for.
The Fed and its junk money made the current disaster possible. Now let’s see if the Fed can get us out of this miasma.
would like to have seen a little on the inflation points and arguments. Inflation is truely eating us alive with wages lagging behind for so long. The future doesn’t look so good either for inflation with the QE3 bomb last week – yikes. I dodged the house buying bullet simply because I didn’t want to chase the prices – it was rediculous from 2000-2007 watching prices rise astronomically. So, I said screw it and deleveraged for 5 years and recent bought my first and last house. Timing is a factor but inflation knaws at the back of my mind.
llpoh – had some good points on the middle class – times have certainly changed.
“A society becomes totalitarian when its structure becomes flagrantly artificial. That is when its ruling class has lost its function but succeeds in clinging to power by force or fraud.”
George Orwell
Dr. Deerg – re inflation, read Charles Hugh Smith’s article that I posted up above on inflation v. deflation. It’s a good article.
http://www.oftwominds.com/blogsept12/deflation-is-good9-12.html
@llpoh,
Your post about the reduced competitiveness of the US middle-class is one of the most important points to consider when determining what is causing our decline. Manufacturing and construction used to be the foundation of our thriving economy, providing the vast majority of the readily-available and well-paying jobs. As technology and globalization have advanced, though, labor is not as valuable as it used to be, domestic automation and foreign labor having replaced much of it. The only option for the middle-class is to acquire new skill sets. Skilled trades, such as electrical work, machining, plumbing, HVAC, and other areas are some of the best routes to prosperity with the least time needed for the education associated with them. Outside of the skilled trades, the medical field always has high demand, although the highest paid positions there require the most time and education to qualify.
For the rest of the middle-class, if unable to change to an entirely new career after having your old one rendered obsolete, one of the best ways to getting back the American dream is to cut back expenditures on luxuries, and use the extra money to buy stock in the best businesses out there. The 1% have prospered better than the rest, not because of any criminal activity or theft from the middle-class, but because they are in the best position to exploit market openings in the developing world. For the other 99% to get a piece of that, we need to all buy our way into ownership of it. That means using $500 to buy 20 shares of Intel stock (or some number of shares of another stock) rather than buying the new I-Phone. It will take time, but our wealth will grow again with some discipline. The system is broken, but we can only fix our own situations by adjusting to the new reality. No amount of government redistribution will ever fix it. It will only ensure continued malaise. Buy partial ownership of what has made the 1% rich, or start your own enterprise.
@Administrator,
No one held a gun to the heads of the middle-class who ran up irresponsible amounts of debt. Those whose wealth decreased because most of their wealth was tied up in a house that cost more than they should have ever paid for a house, while most of the things in the driveway and inside of that house were purchased with more debt, did so of their own volition. The more that society tells them that they are victims, the less that they will take steps to fix their own situations.
Meanwhile, blaming corporations is the wrong answer. Yes, it is wrong that any corporations received any sort of bailouts. Those that required them got into their situations because they made poor decisions. They should have gone bankrupt, been liquidated, and been reborn under new leadership or absorbed by better enterprises. Corporations provide easy access to the things that we need or want at very cheap prices, and I am glad that they exist. However, those which are irresponsible are no less entitled to welfare than are individuals who are simply irresponsible. Demonizing corporations in general makes as much sense as demonizing any ethnicity in general.
“Demonizing corporations in general makes as much sense as demonizing any ethnicity in general.”— Centerline
I know corporations are people.
But, just curious, what ethnicity is a corporation? (I think most corps are Pollacks.)
@Center Line,
You state, “… As technology and globalization have advanced, though, labor is not as valuable as it used to be, domestic automation and foreign labor having replaced much of it…”
If that were completely true, then fuel costs and the like would start to make a difference – which it isn’t.
Reality is that it is NOT the labor cost (paid to employees) that is the biggest reason for offshoring.
Lack of regulation, lack of EPA, lack of OSHA, lack of benefits, lack of pensions, lack of layer upon layer upon layer upon layer of regulators is why companies (especially the mega-corps) offshored.
Can’t imagine how much easier it would be to just have cash at the ready to pay off an official or two compared to the cost of the regulatory nightmare that doing business inside our borders has become.
All the industries you tout have the same problem as manufacturing – they are being taxed, fee’d and regulated out of business within our borders.
Gaining real skills is always a good thing. But thinking that with $10 gas and $1000 a month utility bills that there are still going to be 75 million American homes running furnaces and dishwashers while still affording to pay for repairs is beyond my scope of hopium.
I hope to hell I’m wrong. But with NO ONE (except Ron Paul) talking about the REAL problems, I’ve concluded I’m probably being optimistic, how can we truly expect to fix problems we refuse to acknowledge?
Nice to see you around.
Centerline – I agree in part with what you wrote, but not entirely. I appreciate your thoughts, and encourage you to keep posting, despite the flack you may take from some folks (not TeresaE, by the way).
Teresa – another big reason that corps move offshore is the fact that the US has the highest corporate tax rate in the world. Admittedly, the manage to avoid most of it, but even the process of avoiding it is costly. Some companies are better at avoiding it, and use that fact as a competetive advantage. For those that are not good at it, offshoring is very enticing. And if you add to that the tax rate on dividends, it puts the total tax rate to shareholders vis a vis company profits at approx. 55 or 60% – which is simply not internationally competetive.
Sir:
Lets see…our writer is unhappy because the old addage “a fool and his money will soon be parted” is true. And what is the remedy for the present economic condition of Boobis Americanis? I really can’t remember. There are so many villians; the individual, corprations, government, unions (were’nt really prominently mention) that its a fools errand to attempt to prescribe any practical near term fix(es). A look backwards should point to the failure of the family (individual) as the place to start to fix responsibility. But don’t forget 70 years of believing that we can get something for nothing from government. Wasn’t true before the Great Depression and isn’t now.
20 years ago I’d recommend buying Russian war bonds. Now…gold, silver, oil and other commopdities.
Resp,
G.S.Duca
Shamelessly hijacking (sort of) thread – MUST SEE :
GEAB #67 just out:
http://www.leap2020.eu/GEAB-N-67-is-available-Global-systemic-crisis-October-2012-The-global-economy-sucked-into-a-black-hole-and-world_a12189.html
Extract::
“For these reasons, LEAP/E2020 maintains its June 2012 Red Alert and estimates that, by the end of October 2012, the global economy will be sucked into a black hole against a backdrop of world geopolitics heated white-hot. Suffice it to say that the coming weeks will, according to our team, carry the planet away in a hurricane of unprecedented crises and conflicts.”
@llpoh, TeresaE, and Stucky,
Thank you for taking the time to read and comment.
@TeresaE,
It is true that the trades that I had originally mentioned in my first post are as heavily taxed as any industry in our country. Nevertheless, unless a catastrophic socio-economic collapse happens, people will still need to hire skilled tradesmen to keep their modern conveniences running. Although it is prudent, IMHO, to prepare for societal breakdowns to a certain extent, it is absolutely critical to devote more resources to being prosperous under the conditions that exist right now and for the foreseeable furture–not the ones that we hope will exist or that we simply believe we are doomed to experience at some point in the future. That means learning new skills and putting enough money to the side that you can put it to work for you.
@Stucky,
I was afraid that someone would go back to the Supreme Court decision about corporate campaign donations. I hadn’t really intended to cast corporations as people. They are entities, nevertheless, and as with any entities, biological or otherwise, we cannot generalize them. That is why I stated that demonizing them as a whole is the same as demonizing any entire ethnicity.
Great article Jim. I was at that Lowe’s last night (Tuesday) and there were maybe 12 people in the whole store. I too cannot see it lasting very long.
The old Genardi’s/Sears hardware strip mall down the street from there is really in bad shape. When I moved to towamencin in 1999, that place was really hopping. I don’t know what happened there but think it something to do with the traffic flow. Just not enough people pass by there to make it work.
I am at the Kulpsville PO all the time, if I see you there I will buy you a beer. Good luck.
Towamencin Mike
We could have had that beer at Bones Grille, but it abruptly closed two months ago. Another one bites the dust. Restaurants always close abruptly when times are good.
Good grief, that Bones place is huge. Looks like an elementary school with neon beer signs instead of handprint turkeys in the windows.
Perhaps they would still be slinging the brewskies if they had chosen to not overcapitalize? Renovated an existing building instead of opting for new construction, or gone for half the square footage? Imagine the number of beers they needed to sell just to keep the lights on in that place.
ROME FELL FROM WITHIN, WHEN THEY NO LONGER HAD THE TESTICULAR POWER TO GOVERN. WE ARE FALLING BECAUSE WE CARE MORE ABOUT OFENDING PEOPLE THAN WE DO ABOUT OUR OWN COUNTRY. I CAME OUT OF SERVICE IN 1964, AND WAS PROMPTLY SPAT UPON BY SOME DRUGED DEMONSTRAROR THAT WAS ON WELLFARE, IT TOOK 2 OF NEW YORKS FINEST TIO PULL ME AWAY FROM PULVERIZING HIM. EXCEPT FOR REGAN, WE HAVE NOT HAD A PRESIDENT THAT COULD REALY LEAD.
Charles Hugh Smith linked to my article in his retail article today.
I hear Bones is going to become a Mexican restaurant, so I will buy you a Dos Equis, or Sangria or whatever. What doomed Bones, imho, was the food; it was awful. Also, again, the traffic patterns.
I may be in a minority, but I think food and beverage places will be okay if they are run right. Been out lately? Places I go to are usually busy. Have you seen how many Chickie and Pete’s have opened in the past 2 years? I am not saying Crab Fries are going to save the economy, just that people will always want to get out of the house sometimes.
I have a similar pessimistic view overall, due to the same reasons.
“If I speak, I am condemned. If I stay silent, I am damned.”
Victor Hugo, Les Misérables
The local Melbourne Square Mall here on the east coast of Florida is hanging in there. Four mall stores (or areas appear) to be doing the best:
(1) The Armed Forces Career Center
(2) A Shoe Repair Shop (21 years in the mall)
(3) The Dollar Store
(4) Stores in the Food Court
Great essay.
I’m seeing it Jim! Just saw this this morning…some cheery news before my morning commute to work…
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All these posers wearing gold chains….posing to be one of the “rich and famous”….these rich cocksuckers who hide their wealth and themselves away from what many consider “useless eaters!” OH the IRONY!
if the video doesn’t post properly the link to the local fox station’s coverage is below:
http://landing.newsinc.com/shared/video.html?freewheel=91055&sitesection=ktxl&VID=23816098
I see many pointing at the problem.
But I also see many pointing at the wrong solution – gold. Coming from the other side of the atlantic, I notice that the US went off the gold standard just around the time when things took a turn for the worse. But – guys – there’s more countries in the world. Correlation is not causation. All the world didn’t leave gold standard at the same time.
Open question: what happens when the population increases (or someone saves a lot of money) in a fixed currency system? Yes, obviously deflation. Who does that benefit? Think before you answer..
I’d like to point to another more universal phenomenon: Automation and globalization. Yeah we are seeing a lot of western companies set up shop in low wage countries and profit hugely from the skewed exchange rates. But now, even China is going the automation route.
What we have is over capacity. And no demand. Because producers don’t need to hire. How does a return to the gold standard fix that? Easy – it doesn’t.
How does gold standard work in a globalized economy – especially in a country running a trade deficit? Ow. Ow. Ow.
Privately controlled fractional banking of course is also an “interesting” contributor to our problems. But I still don’t see how reversing fractional banking equals a demand for gold standard.
I think that many would benefit from taking a look at pragcap.com and the “Monetary Realism” papers. I think that they are a good description of how our economic system works today.
As for things that might help us repair our disconnect between economy and real-life facts.. well.. shorter working week seems the obvious answer. But that would eat into the profit mountains so.. yeah 😉
Other debate-worthy ideas include http://www.positivemoney.org.uk/our-proposals/ (full reserve banking with inflation targeting via debt-free new money to the state) and http://www.cesj.org/binaryeconomics/be-inanutshell.htm
I fully expect the richest people in the world to utterly hate both of them. That tells me there’s useful ideas in there.
It boggles the mind to see here in the Boise area new shopping centers going up when there are already so many empty store fronts all over the place. Doesn’t make any sense unless someone is simply building now with cheap credit in anticipation of things all going to hell. Then have a buddy swoop in and pick it up for cheaper still. Wouldn’t surprise me.
Texas ain’t so bad.
Great article which reflects our situation in small town (20,0000) Central Illinois except we did not experience such a great boom and therefore do not feel much of a bust. Incomes have greatly declined with exceptions and health insurance rates have greatly increased.
Our largest and most profitable enterprise the local private non -profit (a joke) hospital (1500 employees) still has record earnings, record bonuses for administrators and doctors, and record fees. It receives all local, state, fed tax exemptions yet discloses nothing to public. Yes, the top 5% have it rigged.
It is so sad to observe the current decline of once rich country. And it is even more sad to see how some people talk badly about the socialism, which they can´t even define. It is funny because more and more people submit to go to live to Canada, which has higher taxes. The worst thing I can see is the lack of any meaningful change. Political parties have almost no power and their expenses force them to play along the big businesses. Two year election term for Congress makes it a constant struggle among the political class to look, behave great. White teeth instead of new ideas, sexy housewives instead of any plans for the future. Who is able to predict anything in this country? Maybe the Chinese…
John B.
Why is socialism so hard to define?
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Article picked up on LewRockwell.
Nice job James! Kind of nostalgic reading your trip up my old commute from Pottstown to Plymouth Meeting. I assume the Trappe is still open. Bars are the last to go.
On another note, kind of happy to be living in Wyoming at this point.
Wyoming Mike – Formerly Arizona Mike – Formerly Pottstown Mike
The Trappe Tavern is still alive and kicking. People still need to drown their sorrows with booze.
http://news.yahoo.com/blogs/sideshow/city-may-sue-developer-spent-20k-remove-40-200922350.html
City may sue developer who spent $20,000 to remove 40 tons of trash from vacant lot
By Eric Pfeiffer
A business developer in the Philadelphia neighborhood of Point Breeze is facing legal action after voluntarily cleaning up more than 40 tons of trash from a vacant lot neighboring his local business.
As the old adage goes, no good deed goes unpunished. Ori Feibush says he visited the local offices of the Philadelphia Redevelopment Authority four times, sent in seven written requests and made 24 phone calls to the agency asking them to take care of a major eyesore: an empty lot next to his coffee shop was home to more than 40 tons of debris.
Not only did the agency fail to act but it also denied Feibush’s offer to clean up the mess himself.
But the Daily News reports that Feibush went ahead with his plans anyway, reportedly spending more than $20,000 of his own money not only to remove the trash but also to level the soil; add cherry trees, fencing and park benches; and repave the sidewalk.
“This was a lot of garbage,” local resident Elaine McGrath told the paper. “Now it’s gorgeous. I’m excited.”
However, the city agency was less excited, demanding that Feibush return the vacant lot to its previous condition and saying it is considering legal action against him.
“Like any property owner, [the authority] does not permit unauthorized access to or alteration of its property,” Paul D. Chrystie, director of communications at the Office of Housing and Community Development told the paper. “This is both on principle (no property owner knowingly allows trespassing) and to limit taxpayer liability.”
And the situation is not without irony. Feibush says he received a citation in August 2011 from the city for litter on the same lot that the city now points out is not his property. Nonetheless, the city’s request puts Feibush in an unusual position. In theory, he committed a good deed, investing his own time and money to improve the condition of his neighborhood when city authorities refused to step up to the plate. But he also knowingly did so after the city refused his request to intervene.
The situation is almost like a reverse case of eminent domain, in which a private owner is attempting to revitalize a piece of public property.
For his part, Feibush thinks the city agency is jealous.
“For a private developer to create a garden, it’s a question of who gets credit. To do it without their blessing, you’re basically insulting them,” he said. “I’m not looking for a thank-you, but I’m not looking for a big F.U.”
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John B
Some day soon the folks in Idaho and Wyoming will take over Western Canada and turn it into what Amurika really should look like.
If you do your research you will find that Canada is THE source of all our problems.
here:
What I’m seeing is the banksta ass-sucking neo-cons about to get exactly what they been pining for ….WWIII
I hope they well enjoy it..,.it”ll be their last.
US EMBASSY IN PAKISTAN UNDER SIEGE
IRAN: Hundreds chant ‘Death to France,’ ‘Down with the U.S.’…
IRAQ: PM condemns U.S. over YOUTUBE anti-Islam film…
INDONESIA: U.S. consulate shut for second day amid protests…
AFGHANISTAN: Hundreds chant anti-American slogans…
U.S. Embassy Under Siege In Kabul
U.S. Embassy in Tunis Engulfed in Black Smoke as Protests Rage
US Embassy in Yemen stormed; protests spread through Muslim world
Chinese protesters attack car of US ambassador in Beijing
Anti-US Protests Spread to More Than a Dozen Countries – ABC News
Yes, the bars will always do well, either from people celebrating with some drinks, or drowning their sorrows with some drinks – can’t lose.
Here in Dallas, TX I am seeing somewhat empty Lowe’s and Home Depot parking lots, although not as bad as in the Northeast . Now, on the other hand our Walmart, on the weekends and after five on weekdays, is busy as hell with all the food-stampers buying tons o’ groceries. I guess that makes Walmart a government funded program.
A big factor in storefronts closing is due to online commerce. I buy a lot of stuff online and have it shipped to my house via Ebay or Amazon, or if I want something really cheap I deal for it on Craigslist and go pick it up. Ebay, Amazon, and Craiglists made the second market takeoff – what you use to give to Goodwill you can now sell for a decent price. You can see the Corporate State trying to attack this second hand market now, with attempts to criminalize selling used items via copyright laws. The City of Dallas, Texas has attacked garage sales now by requiring purchase of $15 per garage sale license.
Well, I want to slit my wrists after reading this article. Anyone want to offer some hope?
Chris
Make sure you do it right.
Chris — you must be a Newbie. This is a place not for hope, but doom and gloom, and rightfully so.
—-
The state of the nation – violation!
A broken promise is as good as a lie.
The hell is humongous, the devil’s among us
and we will burn because we won’t unite!
What are we conceding for our freedom?
Why does anybody think we need ’em
I would rather fight,
than let another die.
We’re the problem,
but we’re also the solution.
ALL HOPE IS GONE!!!
If you want it come and take it from me.
If you think you can, you still don’t know me.
Let me tell you, man, when I said it, I meant it
and I will always have the right to defend it.
Fifty seconds, a hundred murders.
The bill of rights is a bill of sale.
What will you do when the war is over?
What will you do when your system fails!?
We have made the present obsolete.
What do you want?
What do you need?
We’ll find a way,
When all hope is gone!
We’ve seen the fall of the elite,
Bury your life, take your disease
We’ll end the world,
When all hope is gone!
The wretched are the wounded,
The hungry starve to death,
In a place where no one goes,
The air itself is a final breath,
So discontinue, the anti-septic, care charade,
As a cry of justice comes,
A malignant fire fades.
I am the reason your future suffers,
I am the hatred you won’t embrace
I am the worm of a pure gestation,
I am the remedy, spit in my face.
All your laws and rules are outdated,
All your subjects are killing the kings,
I can rattle off a million other reasons why,
But does it matter when the only thing we love will die?
We have made the present obsolete.
What do you want?
What do you need?
We’ll find a way,
When all hope is gone!
We’ve seen the fall of the elite,
Bury your life, take your disease
We’ll end the world,
When all hope is gone!
WHEN ALL HOPE IS GONE!!!
http://www.youtube.com/watch?v=F1xxHQBIITA
Official TBP Motto
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Stucky, isn’t that the signpost at border?
The bookstore? Yes, I believe it was.
I am a Christian libertarian and an adherent of the Austrian “school” of economics. I agree with much of the article and with many of the comments by readers. One reader spoke of Jesus Christ in a favorable way, but his comments received more unfavorable “votes” than favorable ones. However, most Americans do not know who Jesus really is. The book of John (fourth book of the Bible’s New Testament) section is a good place to start remedying that. Read it, pray for enlightenment, confess sins to God (rather than to another human), and ask God for mercy. Those things I did as a young man of nearly 22. The result? In answer to my repentant spirit and plea for mercy, God caused me to understand the gospel (“gospel” means “good news”) and to receive His “only begotten son” (John 3:16) as my savior. That was 54 years ago; yet, I have had no regrets about that heavenly transaction or the resultant, still occurring changes to my heart, mind, and life. “This is a trustworthy statement that deserves full acceptance: Christ Jesus came into the world to save sinners…” (I Timothy 1:15).
Hey, Jim. How about that Slipknot vid I posted, eh?
That’s Progressive!
Happy Texan
Sometimes Jesus HIMSELF posts here, ususally as ‘Jesus, Son of God’. Believe it or not, he gets quite a few thumbs down. Tough crowd, is all I got to say.
Maranatha!
I’m moving to Texas. The economy is great and everyone’s happy. Plus everyone carries a gun. What’s not to like?
I’ve been out and about, placing door-hangers on homes for get Out the Vote effort. We canvassed a very upscale town. Lots of big homes, on big lots. Affluent.
Yet, I’d say about 50% of the homes needed a really good power wash. Many of the homes have algae covering the stucco and vinyl siding. Lawns that were formerly pristine were overgrown.
The town looked frayed, tired and shoddy. Just like our local economy.
NJ is #2 in foreclosures and #1 in unemployment. Maybe someday we’ll be #1 in throwing all the bums out and starting over.
Happy Texan: I’m a Christian. Here’s my blog I post to infrequently:http://chrisritchie.blogspot.com/
But thanks for the encouragement.
Administrator: “The economy is great and everyone’s happy. Plus everyone carries a gun. What’s not to like?” I’m also thinking seriously of moving to Texas. Working on selling the house right now. Your picture of the Norelco razor gave me a good chuckle. Thanks.
Stucky: Yeah, I’m new. Lew Rockwell posted this article today so that’s how I got here. Thanks for the info. Love the reference to Dante’s Divine Comedy. Tough read. I admit I haven’t made it through it yet.
I just turned 60. In the 1970s I was in my twenties and attended a State university. I was able to entirely support myself, maintain a couple of old cars, rent apartments and houses, and pay my tuition with no loans nor subsidies. I supported this by working as a waiter and bartender. I didn’t graduate in four years but then I took some time to travel and do other things.
About a year ago I went to a restaurant and chatted with the waiter. Reflecting about the old days when I earned $11 per hour in the 1970s, the young man admitted he would quit his current job in a second if he could make that much today. I was stunned because that was a living wage in the 70s but a poverty level wage today.
We had a higher standard of living which enabled a person to pursue dreams such as education, or maybe to be an artist or musician while paying the bills with part time work. Today only the rich kids can do what I did.
Do you see what I see? “Are You Seeing What I’m Seeing” can be seen on LewRockwell.com today (Sept. 20, 2012) – Also see some of the Big A’s seasoned columns in LewRockwell’s columnists’ archives on that site.
Not bad for a guy who wanted to chuck it all in a few weeks ago, huh?
What I want to know is how/when all the goodies are going to run out. Is the government going to keep doling out unlimited SS, Medicare, Medicaid, food stamps, etc. until we’re all so broke there’s no more money to take? Or will there be a major backlash against government spending when all the zombies wake up and realize they’re being parasitized? How long is change going to take?
Suburban Sprawl isn’t dead; it’s just moving. It’s always been that as economies grow and die the support structure evolves and moves-often very quickly. While many communities may not transition to ski resorts-as the old western mining towns have done- the ones that attract current industries (like Irvine, CA )will continue to thrive, and build box stores to replace the ones going bankrupt in dying locations. Families with children thrive in the suburbs-as long as they exist-we’ll have them.
Gonatly says, “… Families with children thrive in the suburbs-as long as they exist-we’ll have them…”
As long as what exists, families, or the ‘burbs?
Families will always exist – else nothing else matters, but the ‘burbs? I doubt it.
The ‘burbs were created for a cheap-petroleum based world. One way or the other, that world is changing.
Why wouldn’t the way we live change with it?
What you have is called “normalcy bias,” look into it, I beg you.
Diane, if we knew that, we would be too rich and busy to be hanging out here talking about it.
Read “When Money Dies” if you see the Amazon link above, click on it, search and have a look.
What I think will happen is that the cost/availability of items we need/use on a daily basis will become unreachable for many Americans, so the government will print a few trillion extra bucks and gift them out, which will make our money worth less, which will make things cost more and become more scarce, which will make the government print more worthless bucks, maybe add a few zeros to the end (like bread costing $3,000,000).
Or not. We live in different times than Weimer Germany did.
Take a deep breath, sleep on the info, decide to be an ostrich and go back to yesterday before you opened your eyes – and risk total destruction if the worst happens – or, take what you now see and go forth and find out how to protect you and your family – or at least try, whom truly knows if you can be prepared for something like this.
Good luck to you Diane. And the rest of us too. Enjoy today, plan for tomorrow. That’s the best I can do for ya’. Maybe another member is willing to prognosticate more.
The Khazars have taken over America. They forcefully took over Russia in the Bolshevik revolution and bankrupted it. Then Roosevelt gave them Eastern Europe in the Yalta agreements and they bankrupted that place. Then while they ravaged Eastern Europe the Truman Administration allowed many of them to come to America and they have bankrupted us. They control many high positions in government.
They control the media and altered the historical record in our mainstream history books, and have over the years censored the truth to Americans so at this time many don’t know what has happened and blame the wrong circumstances. We call for America to wake up but how can people wake up when they have been deliberately misinformed all along?
Thunderbird quit reading Mein Kampf, take off the tin foil hat and stay away from electronics. Your conspiracy bullshit isn’t going to cut it here.
CHRIS: I’m glad that you were encouraged by my comments. You mentioned a blogsite, so I read some of what you posted there. You are in the household (Gal. 6:10). I’ll read more of your writings when I can. Happy Texan Jim.
What I think is going on is a restructuring of American life, back to a time and way of living from around 1900. Smaller towns, smaller homes, jobs that don’t pay as much but more people are growing their own food and bartering for the things they need.
I live in a smaller town in Nevada, hard hit if you believe the news by foreclosures. Yes, there are foreclosures, but the inventory of properties is actually quite small. People are moving in from the country closer in to town and on to 1/4 acre lots or bigger where they can grow gardens. They are moving into town and commuting around by bicycle. Barter and trade are getting to be a way of life. The photographer for my daughters wedding is being paid with a couple of gallons of home made Mead, as one example.
And yes, some of the big box retailers are having it rough—good riddance! The local Lowes (only one in the area) is doing O.K., but the much smaller Ace hardware with it’s old time selection is much busier. These smaller businesses in my area are doing better, on average, than the big box stores. Folks are fed up with cheap goods and are buying quality, or they are having things repaired/refinished at a local shop. There are two cobbler and leather shops in the area, busy as they can be. There are at least four bicycle shops, and the repair sections are so busy they can’t hardly keep up.
So yes, I see a bit of what you are seeing, but I also know just how resourceful Americans can be. There’s still plenty of us in our forties and up who know how to make do with skills taught us by our relatives who came through the Great Depression. The youngsters under forty are quick learners and they’ll also figure out how to survive. And if the dollar continues to decline, trade will continue in alternate currencies or in gold and silver while the dollar becomes irrelevent. It’s going to be a tough transition, but I have hope for the future.
Pat,
I agree with you. Opportunity is always out there but its much more difficult to take advantage of than back in the 70’s and 80’s. I graduated from high school in 73 and worked while I lived at home and split expenses with my mom for about two years. I started my business with $1800, an abundance of enthusiasm, near fanatical determination and a line of nave horseshit three miles long.
It’s not just that wages today have not kept up. There are many regulatory obstacles that have been put in place over the past 30 years that have made the bar very high for anyone to be able to start off like we did. Much more debilitating than a lack of decent income. The regulations really protect no one that much but preform an anti competition function by blockading legal paths to funding projects with OPM.
Today you could still put deals together with a relatively small amount of money but you would have to stay under the radar somehow until you can establish a good stream of income to afford the lawyers you will surely need and fines you might even have to pay. If they peg your ass too soon and you don’t have the cash to pay out and they will shut you down before you ever have a chance to make it.
I don’t want to say it was all a cake walk back then but you did not have to walk through as thickly a laid minefield of probable almost unavoidable regulatory offenses or possible criminal charges.
Also back then as long as you were running a tight ship and doing what you contracted to do the FED and State SEC just looked the other way if you had to bend a few rules here and there to get the deal done. Now they are the attack dogs for the securities dealers and investment bankers who are sent after anyone who dares to raise money on their own and cut the finance boys out of commissions, fees, charges, costs, and other expenses. Of course if you are a banker or securities dealer then the regulators still look the other way as much as they can even if you are running a crooked shop.
Any more unless you have a five million or higher deal the bankers don’t want sell it because it’s to small for them to skim enough off to be worth it. Even five million might not get them too excited. So It’s damn hard to do deals that only cost a million or so unless the investment bankers can figure a way to jack it up four or five times The securities guy will tell you to fuck off with your puny deal but you can really get rat fucked by their government goons if you try to get your own investors for yor puny deal. This trend started to really set in during the 80’s. It’s the main reason I’ve have not gone back into my original field since I sold my business in 88 even though there have been several opportunities.
Also the minimum net worth and income requirements have been raised by the FEDs and most states to the point where even many professionals and small business people who are the mainstay of local and small project investment no longer meet the financial requirements to buy into a private offering. This regulates investment opportunities to fewer people, keeps more projects without the securities dealer fluff pack off the street and channels more investment into manipulated registered wall street type offerings and the rigged stock market that allows anyone and everyone to invest.
This is yet another way government is killing real investment with real risks and real rewards for smaller people and smaller guys who do the deals. Deals that make jobs and cause money to flow at the more local or non corporate banker levels. No one really talks about this that much, but I’m sure if you consider it nationally it’s a huge problem.
If its a monetary transaction of any kind the Squids have found a way to get in on it and jack up the fees. Look at how much of our economy is biased on the financial industry. A good part of that is money could have been invested directly with lower costs probably with out any greater risk and much higher rewards by many more individuals. Why shouldn’t Joe Six pack be able to take a shot and put $500 or $1000 bucks in to some local real estate deal, and oil and gas well, convenience market, restaurant, titty bar or what ever if he wants to and why shouldn’t anyone who has the will and ability put together a deal they believe can work legally sell it to him. In the end after winners and losers everyone stands a better chance to profit than with the stock market or low interest savings schemes.
Why is investment the domain of Banks, securities dealers and the very wealthy? Because they own the government maybe? We already have laws against fraud so whats the deal? If we need exchanges for some vehicles why don’t we have local or state exchanges that have no connection with wall street or the federal government to handle small investment projects or companies.
More and more the investment opportunities are being locked up and limited by the securities people and the regulations they either author or block. If you are well connected or can get some help from someone who is then you can get still get around them with out much trouble. But few of us have those connections to start with. Most of us have to go out and find them and most of the ways to do that are illegal now and enforced in “the best interest of the public.” It does little to stop the scammers and probably to a large degree just channels them into the financial industry and then gives them a license. There may be fewer decent paying jobs but there are also fewer avenues for the people to make deals that create jobs and real main street economic activity.