FedUpUSA

Archive for the ‘Economic Crisis’ Category

The middle class American worker is in danger of becoming an endangered species.  The politicians are not telling you the truth, and the mainstream media is certainly not telling you the truth, but the reality is that there is nothing but bad news on the horizon for workers in the United States.  In the old days, when the big corporations that dominate our society did well, that also meant good things for American workers since those corporations would need more of us to work for them.  But in the emerging one world economic system that our economy is being merged into, those corporations have other choices now.  For instance, the big corporations can now choose to limit the number of “expensive” American workers that they employ by shipping millions of jobs to the other side of the world.  And from their perspective, it makes perfect sense.  They can make much bigger profits by hiring people on the other side of the planet to work for them for less than a dollar an hour.  If they can get good production out of those people, then why should they hire Americans for ten to twenty times as much, plus have to give those Americans health insurance and other benefits?  Another major factor in the slow, agonizing death of the American worker is technology.  We live during a period when technology is advancing at a pace that is almost unimaginable at the same time that it is steadily becoming cheaper and cheaper.  That means that it is going to become easier and easier for companies to replace workers with robots and computers.  As I have written about previously, it is being projected that our economy will lose millions of jobs to technology in the coming years.  Yes, some of us will still be needed to help build the robots and the computers, but not all of us will.  And of course the overall general weakness of the economy is not helping matters either.  The American people inherited the greatest economic machine in the history of the world, and we have wrecked it.  Decades of very foolish decisions have resulted in the period of steady economic decline that we are experiencing now.

America is simply not the economic powerhouse that it once was.  Back in 2001, the U.S. economy accounted for 31.8 percent of global GDP.  By 2011, the U.S. economy only accounted for 21.6 percent of global GDP.  That is a collapse any way that you want to look at it.

Today, American workers are living in an economy that is rapidly declining, and their jobs are steadily being stolen by robots, computers and foreign workers that live in countries where it is legal to pay slave labor wages.  Politicians from both political parties refuse to do anything to stop the bleeding because they think that the status quo is working just great.

So don’t expect things to get better any time soon.

The following are 10 amazing charts that demonstrate the slow, agonizing death of the American worker…

#1 Wages And Salaries As A Percentage Of GDP

As you can see, wages as a percentage of GDP are hovering near an all-time record low.  That means that American workers are bringing home a smaller share of the economic pie than ever before.

#2 Average Annual Hours Worked Per Employed Person In The United States

We are an economy that is rapidly trading good paying full-time jobs for low paying part-time jobs.  The decline in average annual hours worked that we have witnessed represents the equivalent of losing millions of jobs.  There has been an explosion of “the working poor” in the United States, and this trend is probably only going to accelerate in the years to come.

#3 Manufacturing Employment

As you can see, there are less Americans working in manufacturing today than there was in 1950 even though the population of the country has more than doubled since then.  The United States has lost more than 56,000 manufacturing facilities since 2001, and yet our politicians stand around and do nothing about it.

#4 Employment-Population Ratio

This is one of my favorite charts.  It shows that there has been absolutelyno employment recovery at all since the end of the last recession.  The percentage of working age Americans that have a job has stayed under 59 percent for 44 months in a row.  How much worse will things get when the next major economic downturn strikes?

#5 Labor Force Participation Rate

This is how the Obama administration is getting the “unemployment rate” to magically go down.  They are pretending that millions upon millions of Americans simply do not want to work anymore.  As you will notice, the decline of the labor force participation rate has accelerated greatly since Barack Obama entered the White House.

#6 Duration Of Unemployment

The average amount of time that it takes an unemployed worker to find a new job has declined slightly, but it is still far above normal historical levels.  It is a crying shame that it takes the average unemployed worker two-thirds of a year to find a new job, but this is the new economic reality that we are all living in.

#7 Delinquency Rate On Residential Mortgages

Since there are not enough jobs for all of us, and since our wages are not rising as rapidly as the cost of living is, a whole bunch of us are falling behind on our mortgages.  As you can see, the mortgage delinquency rate has only dropped slightly and is still way, way above typical levels.

#8 New Homes Sold

American workers also don’t have enough money to go out and buy new homes either.  Yes, new home sales have rebounded slightly this year, but we are nowhere near where we used to be.

#9 Consumer Credit

Millions of American families continue to resort to going into debt in a desperate attempt to make ends meet.  After a slight interruption during the last recession, consumer credit once again is growing at a frightening pace.

#10 Self-Employment At A Record Low

Since there aren’t enough jobs for everyone, why aren’t more Americans trying to start their own businesses?  Well, the reality of the matter is that the government has made it exceedingly difficult to start your own business today.  Taxes, rules, regulations and red tape are choking the life out of millions of small businesses in the United States.  As a result, the percentage of self-employed Americans is at a record low.

As all of these long-term trends continue, the middle class will continue to shrink, poverty in America will continue to explode and government dependence will continue to rise.

The numbers don’t lie.  Today, the number of Americans on Social Security Disability now exceeds the entire population of Greece, and the number of Americans on food stamps now exceeds the entire population of Spain.

We are in the midst of a horrifying economic collapse, and the next major wave of that collapse is rapidly approaching.

Are you ready?

The Economic Collapse

What happens to everyone in the ruling Elites and those desperately trying to join the ruling Elites when the debt-serfs stop paying and the tax donkeys drift away to lower-cost, lower-income lifestyles?

Turn on, tune in, drop out was a famous slogan of the 1960s counterculturepopularized by Timothy Leary, who stated that slogan was “given to him” by Marshall McLuhan during a lunch in New York City in 1966.

Tune in referred to gaining an awareness of the countercultural spectrum of ideas and values, turn on referred to mind-expansion via psychedelics and drop out meant to drop out of conventional society; Leary later explained that “drop out meant self-reliance, a discovery of one’s singularity, a commitment to mobility, choice, and change.”

In 1967, Leary modified the slogan thusly: Drop out. Turn on. Drop in.

Here at oftwominds.com, the slogan has been updated to Tune In, Turn On, Opt Out: tune in means to become aware the status quo is unsustainable and deranging;turn on means to become engaged in self-reliance and taking control of one’s life and livelihood, and opting out means opting out of supporting our financialized cartel-state Neofeudal Debtocracy by being a compliant debt-serf and tax donkey.

People all over the world are tuning in to alternative narratives, turning on to self-reliance and low-cost/low-impact living and opting out of the status quo culture of consumerism, debt and complicity with a parasitic, exploitive financial-state Aristocracy/Plutocracy/Oligarchy/Kleptocracy (take your pick–it’s still the same rapacious Elite whatever name you choose).

The most direct path to an alternative way of living is to opt out of debt and the associated consumerist fantasies of store-bought selfhood: multiple university degrees, brand name clothing, luxury autos, etc. This renunciation of consumerist consumption and debt is called Degrowth (May 9, 2013).

Once you opt out of debt and excess consumption, you need a lot less money to live; that means one can work less and have more time for family, gardening, self-cultivation, entrepreneural enterprises, etc.

For many, the cash economy and generous state benefits beckon. I am not recommending any particular lifestyle or set of choices here, I am simply stating what can easily be observed in any developed nation should you remove the mainstream media/state propaganda blinders: people are earning their livelihood in the informal cash economy, avoiding VAT and sales taxes, and many are drawing some sort of state benefit for one reason or another: unemployment, disability, early retirement, etc.

Others are occupying housing units without paying rent or the mortgage, i.e. squatting.A tide of squatters spreads in Spain in wake of foreclosures:

A 285-unit apartment complex in Parla, less than half an hour’s drive from Madrid, should be an ideal target for investors seeking cheap property in Spain. Unfortunately, two thirds of the building generates zero revenue because it’s overrun by squatters.“This is happening all over the country,” said Jose Maria Fraile, the town’s mayor, who estimates only 100 apartments in the block built for the council have rental contracts, and not all of those tenants are paying either. “People lost their jobs, they can’t pay mortgages or rent so they lost their homes and this has produced a tide of squatters.”

As I have ceaselessly explained here for years, this is the inevitable result of financialization and state-enforced rentier arrangements in a Neofeudal Debtocracy:

Bernanke’s Neofeudal Rentier Economy (May 7, 2013)

The Fatal Disease of the Status Quo: Diminishing Returns (May 1, 2013)

College Grads: It’s a Different Economy (May 3, 2013)

Why Krugman and the Keynesians Are Lackeys for the Neofeudal Debtocracy (April 24, 2013)

What happens to everyone in the ruling Elites and those desperately trying to join the ruling Elites when the debt-serfs stop paying and the tax donkeys drift away to lower-cost, lower-income lifestyles? The ruling kleptocratic financiers and the vast political class of toadies, lackeys, apparatchiks and grifters that do their bidding will be like a bloated general staff who finds their malnourished army of conscripts has slipped away into the night; their parasitic empire will implode because nobody is left to do their bidding.

If you think Tune In, Turn On, Opt Out sounds ludicrous, check back in four years (2017) and eight years (2021) and see how many of your fellow debt-serfs and tax donkeys have quietly abandoned the bloated cost-structure, debt and derangement of the Neofeudal Debtocracy’s twisted consumerist dream.

Charles Hugh Smith – Of Two Minds

Financial promises made under different conditions and assumptions are null and void, period.

Essayist Eric A. touched on a key theme of the next decade in his two-part series A Brief History of Cycles and Time, Part 1 and Part 2: the political, social and financial dominance of the Baby Boom generation, and the eventual erosion of that dominance.

The promises made to the 76 million baby Boomers cannot be met. It’s really very simple: promises made when the economy was growing by 4% a year and the next generation was roughly double the size of the generation entering retirement cannot be fulfilled in an economy growing 1.5% a year (and only growing at all as the result of massive expansions of public and private debt) in which the generation after the cohort entering retirement is significantly smaller.

Just look at this chart: demographics is destiny, and the so-called Silent Generation (roughly those born 1925 – 1942) currently drawing Social Security and Medicare benefits is somewhere between half and 2/3 the size of the Baby Boom.

Meanwhile, Generation X that follows the Baby Boom is almost half the size of the enormous cohort currently entering retirement. Sorry folks, the numbers don’t add up, no matter how you finesse them: a smaller working population in a low-to-zero growth economy burdened with fast-rising debt cannot fund the pay-as-you-go retirement of 76 million citizens, fully 25% of the entire U.S. population.

(Recall that Social Security, Medicare and all other entitlements are pay-as-you-go. There is no trust fund; the current benefits are paid in full by taxes paid by current workers/taxpayers or by Federal borrowing via the sale of Treasury bonds.)

(The numbers and dates of generations are inexact; the Silent Generation, for example, is assumed to have missed serving in World War II but my father was born in 1926, joined the U.S. Navy in 1944 and was on a LST preparing for the invasion of Japan in early 1945, so this is not true of all Silents. The Baby Boom is typically defined as those born between 1946 and 1964, but many of those born in 1959-64 do not feel they belong to the “earlier” Baby Boom, and so some people divide the Baby Boom into two cohorts, or start Generation X in 1961. The lack of precision does not change the basic demographics.)

Everyone takes the present trend, takes out a ruler and pencil and projects it into the future, as if current trends will continue in a straight line. But they never do; the world is dynamic and trends change and reverse.

I have been surprised by the deep emotions that arise out of our cultural Id when generational characterizations and conflicts are openly discussed. Perhaps this is why these issues and feelings are rarely aired in the mainstream media.

In the free-form blogosphere, these officially inconvenient (i.e. suppressed) emotions are expressed, and these few honest expressions garner large audiences and a great many highly charged comments.

My position on the entitlements promised to the Baby Boomers has been clear since 2005 (Boomers, Prepare to Fall on Your Swords June 2005): demographics, the changing job market and the destructive consequence of financializing the U.S. economy render the entitlements promised (Social Security and Medicare) unpayable.

The current 115 million full-time workers cannot sustainably support the 110 million people currently drawing Social Security and Medicare/Medicaid–and the number of retirees entering these entitlement program will rise by millions in the decade ahead.

This worker-beneficiary ratio (already 1-to-1) will only become more unsustainable as Baby Boomers retire and the forces of The End of Work erode full-time jobs The End of (Paying) Work (January 21, 2009).

The Promises That Cannot Be Kept (July 6, 2011)

That Which is Unsustainable Will Go Away: Medicare (May 16, 2012)

The generation in power has the biggest stake in retaining the status quo.Anything that threatens the status quo threatens their power and all that has been promised to them by the status quo.

As a result, any real reform that reduces entitlements to a sustainable level is politically dead on arrival (DOA). Reform is thus as impossible as paying the promised entitlements.

Though he is often presented as belonging to a new generation, President Obama (born 1961) is a Baby Boomer in age, outlook and politics, accepting the fantasy that 25% of the nation can draw hefty, open-ended benefits from Medicare indefinitely.

The solution is to work backwards from what the current generation of workers can afford to pay, not to work forwards from promises made when things were different. The pool of money that can be skimmed from the productive economy via taxes to pay for national defense, the care of veterans, education, welfare in all its forms, corporate and individual, all the myriad departments of government and Social Security pensions and Medicare is not unlimited. Difficult choices will have to be made, and what was promised decades ago is not the key consideration: what is foremost is the sustainability of the nation as an ongoing concern, which means focusing on the generations coming of age and those shouldering the tax burden going forward.

It is a truism of the entitlement mindset that the greater the entitlements promised and offered, the greater the resentments and self-absorption of the beneficiaries. I have often written about the state of permanent adolescence the Savior State/entitlement mindset engenders:

Our Many Layers of Entitlement (September 29, 2011)

The State, Dependency, Addiction and Reciprocity (September 28, 2010)

Opting Out and the Culture of Entitlement (March 29, 2010)

Entitlements, Taxes, Inequality and Three-Way Class Warfare (September 20, 2010)

Tyranny of the Majority, Corporate Welfare and Complicity (April 9, 2010)

Entitlements and the Federal Deficit (February 5, 2011)

We desperately need an adult discussion focused on reality rather than resentment. The solution will require dismantling open-ended, everyone-deserves-everything Medicare, which will bankrupt the nation itself. The solution is currently “impossible”: The “Impossible” Healthcare Solution: Go Back to Cash (July 29, 2009)

As for pay-as-you-go Social Security, it will have to be means-tested: those drawing thousands of dollars a month in other pensions will have to let go of “what wuz promised” so other Boomers who have only Social Security can receive their full benefit. What exactly is so difficult about that?

I am a Baby Boomer, born 1953, and I hope our generation musters the courage to face reality and the need for re-assessment and adjustment and yes, the word that is tossed around in endless lip-service but avoided in the real world, sacrifice. Anything less will be a generational failure of monumental proportions.

I refuse to burden our children and grandchildren with mountains of debt so I can get the full measure of “what I wuz promised.” Financial promises made under different conditions and assumptions are null and void, period. Reality trumps “what wuz promised” every time.

What nobody dares say is that if the 76 million Boomers press their claims to the point the nation is bankrupted, then the next generations (X and Y) will have to wrest political power from the retirees, not for their own sake but for the sake of the nation and for the generations behind them.

Charles Hugh Smith – Of Two Minds

Higher Numbers of Americans Take Their Lives than During the Depths of the Great Depression

Suicide rates are tied to the economy.

The Boston Globe reported in 2011:

A new report issued today by the Centers for Disease Control and Prevention finds that the overall suicide rate rises and falls with the state of the economy — dating all the way back to the Great Depression.

The report, published in the American Journal of Public Health, found that suicide rates increased in times of economic crisis: the Great Depression (1929-1933), the end of the New Deal (1937-1938), the Oil Crisis (1973-1975), and the Double-Dip Recession (1980-1982). Those rates tended to fall during strong economic times — with fast growth and low unemployment — like right after World War II and during the 1990s.

During the depths of the Great Depression, suicide rates in America significantly increased. As the Globe notes:

The largest increase in the US suicide rate occurred during the Great Depression surging from 18 in 100,000 up to 22 in 100,000 …

We’ve previously pointed out that suicide rates have skyrocketed recently:

The number of deaths by suicide has also surpassed car crashes, and many connect the increase in suicides to the downturn in the economy. Around 35,000 Americans kill themselves each year (and more American soldiers die by suicide than combat; the number of veterans committing suicide is astronomical and under-reported). So you’re2,059 times more likely to kill yourself than die at the hand of a terrorist.

NBC News reported in March:

Suicide rates are up alarmingly among middle-aged Americans, according to the latest federal government statistics.

They show a 28 percent rise in suicide rates for people aged 35 to 64 between 1999 and 2010.

RT reports:

In a letter to The Lancet medical journal, scientists from Britain, Hong Kong and United States said an analysis of data from Centers for Disease Control and Prevention indicated that while suicide rates increased slowly between 1999 and 2007, the rate of increase more than quadrupled from 2008 to 2010, Reuters reported.

Earlier this month, NY Daily News wrote:

The Great Recession may have been at the root of a great depression that caused suicides to soar among middle-aged Americans, a government report speculates.

The annual suicide rate for adults ages 35 to 64 spiked in the past decade, according to a study from the U.S. Centers for Disease Control and Prevention.

And a shaky economy that nose-dived into the worst financial crisis since the Depression may be the biggest reason why.

***

The CDC’s Morbidity and Mortality Weekly Report said the annual suicide rate jumped 28.4% from 1999-2010.

It was the biggest increase of any age group, said the CDC, citing “the recent economic downturn” as one of the “possible contributing factors” for the increase.

“Historically, suicide rates tend to correlate with business cycles, with higher rates observed during times of economic hardship,” the report said.

David Stuckler (a senior research leader in sociology at Oxford), and Sanjay Basu (an assistant professor of medicine and an epidemiologist in the Prevention Research Center at Stanford), write in the New York Times:

The correlation between unemployment and suicide has been observed since the 19th century.

(And see these articles by the Wall Street Journal and the Los Angeles Times.   This is obviously true world-wide.  For example, last year the New York Times reported:

The economic downturn that has shaken Europe for the last three years has also swept away the foundations of once-sturdy lives, leading to an alarming spike in suicide rates. Especially in the most fragile nations like Greece, Ireland and Italy, small-business owners and entrepreneurs are increasingly taking their own lives in a phenomenon some European newspapers have started calling “suicide by economic crisis.”

***

In Greece, the suicide rate among men increased more than 24 percent from 2007 to 2009, government statistics show. In Ireland during the same period, suicides among men rose more than 16 percent. In Italy, suicides motivated by economic difficulties have increased 52 percent, to 187 in 2010 — the most recent year for which statistics were available — from 123 in 2005.)

Indeed, more Americans are killing themselves today than during the Great Depression. Specifically, there were were 123 million Americans in 1930.  The maximum suicide rate during the depths of the Great Depression was 22 out of 100,000  Americans.  That means that up to  27,060 Americans killed themselves each year.

In contrast, the U.S. Centers for Disease Control reports that 38,364 Americans committed suicide in 2010. In other words, 2010 suicides were approximately 142% of suicides during the depths of the Great Depression. (The suicide rate is lower today than during the Great Depression, but – given that there aremore Americans – there are more suicides each year.)

The head of my local county’s mental health services confirmed to me today that there are now more suicides now than during the Great Depression.

The Root Causes: Unemployment and Foreclosure

Why do more people kill themselves during severe downturns?  It’s not just a downturn in the business cycle in some general sense.  It’s more specific than that.

Unemployment and foreclosure are the largest triggers in increased suicide risk.

David Stuckler and Sanjay Basu write:

People looking for work are about twice as likely to end their lives as those who have jobs.

***

Unemployment is a leading cause of depression, anxiety, alcoholism and suicidal thinking.

ABC News points out:

“Joblessness is a risk factor for suicide,” said Nadine Kaslow, professor of psychology in the Department of Psychiatry and Behavioral Sciences at Emory University in Atlanta. “The stress is just overwhelming. … People are freaked out.”

Bloomberg reports:

“The suicide rate started accelerating in 2008, 2009 and 2010 — someone might still be working, but their house is underwater, or they’re working but they’re working part-time,” Eric Caine, the director of the CDC’s Injury Control Research Center for Suicide Prevention, said by telephone. “These things ripple into families. There’s an economic stress.”

NY Daily News writes:

“Most people who commit suicide tend to suffer from major depression, and this vulnerability tends to be brought forth by very stressful situations like losing one’s home or job,” [Dr. Dan Iosifescu, director of mood and anxiety disorders program at Mount Sinai Hospita] said.

NBC News reports:

The American Association for Suicidology says economic recessions don’t normally affect suicide rates.

“Although US suicide rates did increase slightly during the years of the Great Depression, reaching a peak rate of 17.4/100,000 in 1933, subsequent US recessions have not been found to lead to increased national rates of suicide in the period of or immediately following each recession,” the group says.

The latest numbers suggest suicide rates for middle-aged Americans now surpass the peak during the Depression. And there’s another possible explanation.

“There is a clear and direct relationship between rates of unemployment and suicide,” the suicidology group says in its statement.

“The peak rate of suicide in 1933 occurred one year after the total US unemployment rate reached 25 percent of the labor force. Similar findings have been documented internationally. At the individual level, unemployed individuals have between two and four times the suicide rate of those employed.”

The group also raises concern about the home foreclosure rate.

Indeed, it is likely that more people have lost their jobs during this “Great Recession” than during the Great Depression … especially when you look at the masses of people who have given up altogether and dropped out of the work force.

And it is possible that more people have lost their homes through foreclosure than during the Great Depression as well.

No wonder there are so many suicides …

Postscript:  If you suffer from depression, this may help.

Washington’s Blog