Now that a major global recession has begun, you would expect major retailers like Wal-Mart to run into trouble as consumer spending dries up, and that is precisely what is happening. On Wednesday, shares of Wal-Mart experienced their largest single day decline in 27 years after an extremely disappointing earnings projection was released. The stock was down about 10 percent, which represented the biggest plunge since January 1988. Over 21 billion dollars in shareholder wealth was wiped out on Wednesday, and this was just the continuation of a very bad year for Wal-Mart stockholders. Overall, shares had already declined by 22 percent so far in 2015 before we even got to Wednesday. Here is more on this stunning turn of events from Bloomberg…
Wal-Mart Stores Inc. suffered its worst stock decline in more than 27 years after predicting a drop in annual profit, underscoring the giant retailer’s struggles to reignite growth.
Earnings will decrease 6 percent to 12 percent in fiscal 2017, which ends in January of that year, the Bentonville, Arkansas-based company said at its investor day on Wednesday. Analysts had estimated a gain of 4 percent on average, according to data compiled by Bloomberg.
If it was just Wal-Mart that was having trouble, that would be bad enough. But the truth is that signs that the U.S. economy has entered another major downturn are popping up all around us. Just consider the following list of economic indicators that Graham Summers recently put out…
The Fed has now kept interest rates at zero for 81 months.
This is the longest period in the history of the Fed’s existence, lasting longer than even the 1938-1942 period of ZIRP.
And the US economy is moving back into recession. Consider that…
1) Industrial production fell five months straight in the first half of 2015. This has never happened outside of a recession.
2) Merchant Wholesalers’ Sales are in recession territory.
3) The Empire Manufacturing Survey is in recession territory.
4) All four of the Fed’s September Purchasing Manager Index (PMI) readings (Philadelphia, New York, Richmond, and Kansas City) came in at readings of sub-zero. This usually happens when you are already 4-5 months into a recession. (H/T Bill Hester)
Another huge red flag is the fact that month after month fewer products are being shipped around the country compared to last year.
If less stuff is being shipped around by truck, rail and air, is it a sign that the economy is getting better or is it a sign that the economy is getting worse?
The answer, of course, is self-evident. With that in mind, please read the following excerpt which comes from a recent article by Wolf Richter…
It has been crummy all year: With the exception of January and February, the shipping volume has been lower year-over-year every month!
The index is broad. It tracks data from shippers, no matter what carrier they choose, whether truck, rail, or air, and includes carriers like FedEx and UPS.
Evidence keeps piling up in the most unpleasant manner that something isn’t quite right in the real economy. The world is now in an inexplicable slowdown – “inexplicable” for central bankers who’ve cut interest rates to zero or below zero years ago, and who’re still dousing some economies with QE even as governments are running up big deficits. And yet, despite seven years of this huge monetary and fiscal stimulus, the global economy is deteriorating.
Okay, so is there anyone out there that still believes that the U.S. economy is in good shape?
The Obama administration will probably not admit it for a very long time, but the truth is that the numbers very clearly tell us that we are in a recession.
Anybody out there, whether an “expert” or just someone you happen to know, that tells you that everything is just fine is either completely ignorant or they are purposely lying to you.
And just like in 2008, state and local governments are starting to get into tremendous financial trouble as the real economy sputters. For example, the governor of Illinois has told reporters that “we are out of money now” and that pension fund payments will be delayed as a result…
Illinois will delay payments to its pension fund as a prolonged budget impasse causes a cash shortage, Comptroller Leslie Geissler Munger said.
The spending standoff between Republican Governor Bruce Rauner and Democratic legislative leaders has extended into its fourth month with no signs of ending. Munger said her office will postpone a $560 million retirement-fund payment next month, and may make the December contribution late.
“This decision is choosing the least of a number of bad options,” Munger told reporters in Chicago on Wednesday. “For all intents and purposes, we are out of money now.”
When these sorts of things started happening in 2008, Fed Chairman Ben Bernanke and the Bush administration went into full-blown denial mode. They kept telling all of us not to worry and that everything would be okay, and that just made things worse in the end.
The same thing is happening now. The Obama administration and the mainstream media keep talking about an “economic recovery” even in the face of numbers such as I have discussed in this article.
Perhaps things are going well for you personally at the moment, and that is great. But now is not the time to buy lots of new toys. Nor is it the time to accumulate more debt.
Instead, now is a time to position yourself for a period of difficulty that could stretch on for years.
The next recession is here, and it is going to grow progressively worse.
The wise will take heed and make preparations, but the foolish will just keep on doing what they have been doing until it is far too late.
Should the federal government be spending billions of dollars to pump up Wal-Mart’s profits? I know that question sounds really bizarre, but unfortunately this is essentially what is happening. Because Wal-Mart does not pay them enough money, hundreds of thousands of Wal-Mart employees enroll in Medicaid, food stamps and other social welfare programs. Even though Wal-Mart makes enormous profits, they refuse to properly take care of their employees so the federal government has to do it. And of course this is not just a Wal-Mart problem. There are hundreds of other major corporations doing exactly the same thing. And they will keep on doing it as long as they can because relying on the federal government to take care of their employees allows them to make much larger profits. This gives these companies an enormous competitive advantage and it distorts the marketplace. If you love the free enterprise system, you should be aghast at this. Our big corporations have become the biggest “welfare queens” of all, and Wal-Mart is near the top of that list.
Does your local Wal-Mart store seem like it needs help from the federal government?
Of course not.
Wal-Marts all over the nation were absolutely packed this holiday season, but according to a recent Bloomberg article, the average amount of welfare that Wal-Mart employees receive from the government each year breaks down to about $420,000 per store…
Wal-Mart’s low wages have led to full-time employees seeking public assistance. These are not the 47 percent, lazy, unmotivated bums. Rather, these are people working physical, often difficult jobs. They receive $2.66 billion in government help each year (including $1 billion in healthcare assistance). That works out to about $5,815 per worker. And about $420,000 per store.
Does that make you angry?
Today, Wal-Mart employs approximately 1.2 million people in the United States, and it makes a yearly profit of about 17 billion dollars.
So why does it need 2.6 billion dollars of help from the U.S. government?
Wal-Mart is a colossal money-making behemoth. Just consider the following numbers…
The size of Wal-Mart is sometimes difficult to visualize. To put it into some context, consider the following: 100 million U.S. shoppers patronize Wal-Mart stores every week. Wal-Mart has twice the number employees of the U.S. Postal Service, a larger global computer network than the Pentagon, and the world’s largest fleet of trucks. Americans spend about $36 million dollars per hour at the stores. Wal-Mart now sells more food than any other company in the world, capturing one of every four dollars spent on food in the U.S. The average American family of four spends over $4,000 a year there. Each week, it has 200 million customers at more than 10,400 stores in 27 countries. If the company were an independent country, it would be the 25th largest economy in the world.
Wal-Mart does well enough to be able to pay their workers a livable wage.
And yet they refuse to do it.
Shame on them.
Meanwhile, the six heirs of Wal-Mart founder Sam Walton have as much wealth as the poorest one-third of all Americans combined.
This reminds me of something that I read in the fifth chapter of James the other day…
Come now, you rich men, weep and howl for your miseries that shall come upon you. Your riches are corrupted and your garments are moth-eaten. Your gold and silver are corroded, and their corrosion will be a witness against you and will eat your flesh like fire. You have stored up treasures for the last days. Indeed the wages that you kept back by fraud from the laborers who harvested your fields are crying, and the cries of those who harvested have entered into the ears of the Lord of Hosts. You have lived in pleasure on the earth and have been wayward. You have nourished your hearts as in a day of slaughter.
But we continue to reward this behavior, don’t we?
100 million of us continue to visit Wal-Mart every single week, and we continue to fill up our shopping carts with cheap products that are made outside this country.
We refuse to support American workers and American businesses, and this is a recipe for utter disaster. For much more on this, please see my previous article entitled “National Economic Suicide: The U.S. Trade Deficit With China Just Hit A New Record High“.
The truth is that we cannot consume our way to prosperity. When we consume far more wealth than we produce, we pile up debt and we become poorer as a nation.
And as a country we have become exceedingly cold-hearted toward our workers. If you truly love free markets and capitalism, you should be encouraging big companies to pay their workers properly. Instead, we are moving closer and closer to the slave labor model employed by China and other communist nations with each passing day. Sadly, I am becoming increasingly convinced that many prominent “pro-business” voices in America today are actually closet communists. They seem to want everything to be made in China and for American workers to be paid just like Chinese workers.
At this point, the U.S. middle class is well on the way to being destroyed. As I have written about previously, 40 percent of all American workers now make less than what a minimum wage worker made back in 1968 after you account for inflation.
How is the middle class supposed to survive in such an environment?
And for any “pro-business” people that want to defend Wal-Mart, do you actually like paying suffocating taxes to support all of the people that are being forced on to the safety net?
What is our society going to look like as millions more Americans become dependent on the federal government each year? Government dependence is already at an all-time record high. How much worse do things have to get before we admit that we have a real problem?
Unfortunately, it looks like our problems are only going to accelerate in 2015. Thanks to the stunning decline in the price of oil, we are starting to lose good paying jobs in the energy industry…
One company caught in the industry downturn is Hercules Offshore Inc. The Houston-based firm is laying off 324 employees, roughly 15% of its workforce, because oil companies aren’t renewing contracts for its offshore drilling rigs in the Gulf of Mexico while crude prices are depressed.
“It’s been breathtaking,” said Jim Noe, executive vice president of Hercules, which was founded in 2004. “We’ve never seen this glut of supply and dislocation in oil markets. So we’re not surprised to see a significant decline in demand for our services.”
These are jobs that we cannot afford to lose.
Since the end of the last recession, the energy industry has been the leading creator of good paying jobs in America.
But now as the U.S. energy boom goes bust, it might lead the way in job losses.
In order to have a middle class, we have got to have middle class jobs.
Unfortunately, those kinds of jobs are disappearing and the entire U.S. economy is moving toward the Wal-Mart model.
In the end, we will all pay a great price for such foolishness.
It may not happen this month, or even this year, but food stamp riots are coming to America. In fact, we got a small preview of the coming food stamp riots this past weekend when a “temporary system failure” caused food stamp cards to stop working in 17 U.S. states. Within hours, there were “mini-riots” at Wal-Marts and other retailers that rely heavily on food stamp users. So what would happen if food stamp benefits were cut off or reduced for an extended period of time? As you will see below, if Congress had not pushed through a “deal”, the USDA would have started cutting off food stamp benefits on November 1st. Considering the fact that 47 million Americans are on food stamps and more than 100 million Americans are enrolled in at least one welfare program run by the federal government, that could have sparked massive rioting. So the good news is that the coming food stamp riots will probably not happen in November. The bad news is that the “deal” in Congress only delays the political fighting until after Christmas. In just a few months we will be dealing with a potential “government shutdown” and a debt ceiling deadline once again.
Most Americans have no idea what almost just happened. According to Reuters, the state of North Carolina had already cut off some welfare benefits for the month of November…
North Carolina has become the first state to cut off welfare benefits to poor residents in the wake of the partial federal government shutdown, ordering a halt to processing November applications until a deal is reached to end the federal standstill.
More than 20,000 people – most of them children – receive monthly benefits aimed at helping them buy food and other basic supplies through North Carolina’s welfare program, called Work First, which is fully funded by the federal government. Recipients must reapply each month.
And as Mac Slavo recently detailed, the USDA was already planning to cut off food stamp assistance to millions of Americans on November 1st…
We say next month because the USDA, which oversees the Supplemental Nutritional Assistance Program (SNAP), has just issued an order to SNAP agency directors calling for their respective States to implement an emergency contingency program because of government funding issues. In a letter obtained by the Crossroads Urban Center food pantry, the USDA is directing state agencies to, “delay their November issuance files and delay transmission to State Electronic Benefit Transfer (EBT) vendors until further notice.”
What this means is that should Congress fail to increase the debt ceiling this week, come November there will literally be millions of people in the United States who will have exactly zero dollars transferred to their EBT cards.
What will happen to the nearly 50 million people who depend on these benefits to survive?
In fact, there have been quite a few news reports that have confirmed this…
In Utah, Fox News 13 in Salt Lake City reported that a local provider recently received a letter from the USDA sticking to the November 1 cut-off date.
“This is going to create a huge hardship for the people we serve here in our food pantry,” Bill Tibbits, Associate Director at Crossroads Urban Center, told Fox News 13.
“What this means [is] if there’s not a deal, if Congress doesn’t reach a deal to get federal government back up and running, in Utah about 100,000 families won’t get food stamp benefit,” added Tibbits.
The USDA letter says in part, “in the interest of preserving maximum flexibility, we are directing states to hold their November issuance files and delay transmission to state electronic benefit transfer vendors until further notice.”
So what would have happened if tens of millions of Americans suddenly had their food stamp benefits cut off without warning?
Well, what happened last weekend can give us a few clues. Just check out what happened at one Wal-Mart in Mississippi…
Customers staged a disturbance then walked out of a Mississippi Walmart store with groceries that hadn’t been paid for Saturday night after a computer glitch left them unable to use their food stamp cards.
People in 17 states found themselves unable to buy groceries with their Supplemental Nutrition Assistance Program cards after a routine check by vendor Xerox Corp. resulted in a temporary system failure.
Shortly after the mini-riot, managers decided to temporarily close the store, citing customer safety.
Due to this technical glitch, many parents were left wondering how they were going to feed their families. If this is the kind of anger that is unleashed over a single failed trip to the grocery store, what would we see if this kind of thing went on for an extended period of time?
At some Wal-Mart stores down in Louisiana, EBT cards were not showing any limits on Saturday night, and within two hours many store shelves in the grocery section were completely cleared of merchandise…
Shelves in Walmart stores in Springhill and Mansfield, LA were reportedly cleared Saturday night, when the stores allowed purchases on EBT cards even though they were not showing limits.
The chaos that followed ultimately required intervention from local police, and left behind numerous carts filled to overflowing, apparently abandoned when the glitch-spurred shopping frenzy ended.
Springhill Police Chief Will Lynd confirms they were called in to help the employees at Walmart because there were so many people clearing off the shelves. He says Walmart was so packed, “It was worse than any black Friday” that he’s ever seen.
Sadly, this was only a very small preview of the massive food stamp riots that are eventually coming to America. I like how Mike Adams explained what we are likely to see in the future…
Why does any of this matter? Because this is exactly the same way these people will behave when the federal government goes into default and nearly 50 million EBT cards stop working nationwide.
Fifty million. Consider that for a moment. Most of those 50 million people live in high-density cities. Many are proud owners of Obama phones, Obama food stamps, Obama unemployment checks and Obama subsidized housing. They have absolutely no clue that the government upon which they wholly depend to put food on the table is teetering on the verge of permanent collapse. (Seriously, they cannot conceive of the idea of government “running out of money” because they do not understand where money comes from.) Because of this distorted belief, they do not prepare for any future events other than more Obama handouts. Their entire “preparedness” plan is to vote for Democrats, because that’s who they know will give them the most handouts. And they will always win the popular vote, too, because any politician promising to restore responsible fiscal spending to the government by cutting programs will be viciously accused of being “mean” or involved in “hating poor people.” So the government handouts will only ratchet higher and higher, ensnaring more and more people, until the entire system is unsustainable and collapses under its own weight.
When that system of dependence fails, those who depend on it will panic in mere hours. As proof of this, consider the fact that this mass looting of Wal-Mart stores happened in less than three hours after the Saturday EBT card glitch struck. Police had to be called in to prevent the situation from getting completely out of control, and it was offline for only part of one day.
Now imagine what will happen when EBT cards go offline for 24, 48 or even 72 hours. And imagine it happening in every U.S. city simultaneously.
Of course not all Americans would go wild when food stamp benefits are cut off.
Other Americans express their desperation in other ways. According to Bloomberg, an increasing number of people are starting to sell hair, breast milk and their own eggs in a desperate attempt to make ends meet…
Hair, breast milk and eggs are doubling as automated teller machines for some cash-strapped Americans such as April Hare.
Out of work for more than two years and facing eviction from her home, Hare recalled Louisa May Alcott’s 19th-century novel and took to her computer.
“I was just trying to find ways to make money, and I remembered Jo from ‘Little Women,’ and she sold her hair,” the 35-year-old from Atlanta said. “I’ve always had lots of hair, but this is the first time I’ve actually had the idea to sell it because I’m in a really tight jam right now.”
The mother of two posted pictures of her 18-inch auburn mane on www.buyandsellhair.com, asking at least $1,000 and receiving responses within hours. Hare, who also considered selling her breast milk, joins others exploring unconventional ways to make ends meet as the four-year-old economic expansion struggles to invigorate the labor market and stimulate incomes.
We have moved into a time when things are becoming increasingly unstable and when people are becoming increasingly desperate.
In an attempt to keep order, the authorities will become increasingly forceful in the years ahead. At this point, many law enforcement officers already believe that there is very little that they cannot do to exert their “authority” over the rest of us. Just check out video of a drunk off-duty police officer “arresting” a woman that refused to go out on a date with him right here. Sadly, this type of behavior is becoming way too common these days.
And it looks like major financial institutions are getting ready for the chaos that is eventually coming as well. In fact, according to an article by Paul Joseph Watson, Chase Bank is now placing a limit on cash withdrawals and is banning business customers from sending wire transfers out of the country…
Chase Bank has moved to limit cash withdrawals while banning business customers from sending international wire transfers from November 17 onwards, prompting speculation that the bank is preparing for a looming financial crisis in the United States by imposing capital controls.
Numerous business customers with Chase BusinessSelect Checking and Chase BusinessClassic accounts have received letters over the past week informing them that cash activity (both deposits and withdrawals) will be limited to a $50,000 total per statement cycle from November 17 onwards.
Fortunately, the chaos that would have been unleashed if Congress had not made a deal has now been delayed for a few months.
But by kicking the can down the road, our politicians continue to make our long-term problems even worse. Either we are going to have tremendous pain now, or we are going to have even worse pain later. Peter Schiff explained the choice that we are facing this way…
If Republicans were to inexplicably prevail, and the federal government were to cut spending so that its expenditures matched its tax revenues (a truly radical idea) the country’s financial mess would be laid bare. The government would have to weigh the relative costs and benefits of making interest payments on Treasury debt (primarily to foreign creditors) or to trim entitlements promised to U.S. citizens. But those are choices we will have to make sooner or later anyway. In fact we should have dealt with these issues years ago. But generations of mechanistic debt ceiling increases have allowed us to perpetually kick the can down the road. What could possibly be gained by doing it again, particularly if it is done with no commitment to change course?
The Democrats’ argument that America needs to pay its bills is just hollow rhetoric. Paying off one’s Visa bill with a new and bigger MasterCard bill can’t be considered a legitimate payment of debt. At best it is a transfer. But in the government’s case, it doesn’t even qualify as that. Treasury debt is primarily bought by the Fed, foreign central banks, and major financial institutions. None of that will change with a debt ceiling increase. We will just go to the same people for greater quantities. So it’s like paying off your Visa card with a bigger Visa card.
We are living on borrowed time that has been purchased by stealing money from future generations.
We are literally destroying the future in order to make the present more palatable.
But whether it is this year, or next year or the year after that, at some point we are going to experience the pain that results from decades of incredibly foolish decisions.
I hope that you are getting ready.
Would you be angry if you had to pay a big Wall Street bank a fee before you could get the money that you worked so hard to earn? Unfortunately, that is exactly the situation that millions of American workers find themselves in today. An increasing number of U.S. companies are paying their workers using payroll cards that are issued by large financial institutions. Wal-Mart, Home Depot, Walgreens and Taco Bell are just some of the well known employers that are doing this. Today, there are 4.6 million active payroll cards in the United States, and some of the largest banks in the country are issuing them. The list includes JPMorgan Chase, Bank of America, Wells Fargo and Citigroup. The big problem with these cards is that there is often a fee for just about everything that you do with them. Do you want to use an ATM machine? You must pay a fee. Do you want to check your balance? You must pay a fee. Do you want a paper statement? You must pay a fee. Did you lose your card? You must pay a big fee. Has your card been inactive for a while? You must pay a huge fee. The big Wall Street banks are systematically extracting enormous fees from the working poor, and someone needs to do something to stop this.
The truth is that most American families need every penny that they earn. In America today, 53 percent of all workers make less than $30,000 a year.
It is hard to do everything that you need to do on less than $2,500 a month. If you doubt this, you should try it some time.
That is one reason why the fees that the big Wall Street banks hit payroll card users with are so insidious. The following is a short excerpt from a recent CNBC article about this phenomenon…
But in the overwhelming majority of cases, using the card involves a fee. And those fees can quickly add up: one provider, for example, charges $1.75 to make a withdrawal from most A.T.M.’s, $2.95 for a paper statement and $6 to replace a card. Some users even have to pay $7 inactivity fees for not using their cards.
These fees can take such a big bite out of paychecks that some employees end up making less than the minimum wage once the charges are taken into account, according to interviews with consumer lawyers, employees, and state and federal regulators.
Devonte Yates, 21, who earns $7.25 an hour working a drive-through station at a McDonald’s in Milwaukee, says he spends $40 to $50 a month on fees associated with his JPMorgan Chase payroll card.
If you are just barely scraping by every month, can you really afford to be paying $50 a month in fees to the fatcats at JPMorgan Chase?
Of course not.
But JPMorgan Chase is far from alone. Just check out all of the fees that another large financial institution is hitting users with…
On some of its payroll cards, NetSpend charges $2.25 for out-of-network A.T.M. withdrawals, 50 cents for balance inquiries via a representative, 50 cents for a purchase using the card, $5 for statement reprints, $10 to close an account, $25 for a balance-protection program and $7.50 after 60 days of inactivity, according to an April presentation by the company reviewed by The Times.
They are taking advantage of extremely vulnerable people and they know it.
And we see this kind of thing happening with other types of cards as well. For example, in some states unemployment benefits are now deposited on prepaid debit cards, and the banks that issue these cards are more than happy to extract huge fees from unemployed people…
Shawana Busby does not seem like the sort of customer who would be at the center of a major bank’s business plan. Out of work for much of the last three years, she depends upon a $264-a-week unemployment check from the state of South Carolina. But the state has contracted with Bank of America to administer its unemployment benefits, and Busby has frequently found herself incurring bank fees to get her money.
To withdraw her benefits, Busby, 33, uses a Bank of America prepaid debit card on which the state deposits her funds. She could visit a Bank of America ATM free of charge. But this small community in the state’s rural center, her hometown, does not have a Bank of America branch. Neither do the surrounding towns where she drops off her kids at school and attends church.
She could drive north to Columbia, the state capital, and use a Bank of America ATM there. But that entails a 50 mile drive, cutting into her gas budget. So Busby visits the ATMs in her area and begrudgingly accepts the fees, which reach as high as five dollars per transaction. She estimates that she has paid at least $350 in fees to tap her unemployment benefits.
There is something that is so greedy about all of this.
When the financial crisis hit back in 2008, the big banks had no problem begging the entire nation for mercy.
But when it comes time to show mercy to the poor, they tell us that it is “just business”.
In America today, there are tens of millions of families that are just barely surviving from month to month. The big banks should not be preying on them like this.
With each passing year, the ranks of the working poor in this country continue to get larger. The following statistics are from one of my previous articles entitled “35 Statistics About The Working Poor In America That Will Blow Your Mind“…
#1 According to the U.S. Census Bureau, more than 146 million Americans are either “poor” or “low income”.
#2 According to the U.S. Census Bureau, 57 percent of all American children live in a home that is either “poor” or “low income”.
#3 Back in 2007, about 28 percent of all working families were considered to be among “the working poor”. Today, that number is up to 32 percent even though our politicians tell us that the economy is supposedly recovering.
#4 Back in 2007, 21 million U.S. children lived in “working poor” homes. Today, that number is up to 23.5 million.
#5 In Arkansas, Mississippi and New Mexico, more than 40 percent all of working families are considered to be “low income”.
#6 Families that have a head of household under the age of 30 have a poverty rate of 37 percent.
#7 Half of all American workers earn $505 or less per week.
#8 At this point, one out of every four American workers has a job that pays $10 an hour or less.
#9 Today, the United States actually has a higher percentage of workers doing low wage work than any other major industrialized nation does.
#10 Median household income in the United States has fallen for four consecutive years.
#11 Median household income for families with children dropped by a whopping $6,300 between 2001 and 2011.
#12 The U.S. economy continues to trade good paying jobs for low paying jobs. 60 percent of the jobs lost during the last recession were mid-wage jobs, but 58 percent of the jobs created since then have been low wage jobs.
#13 Back in 1980, less than 30% of all jobs in the United States were low income jobs. Today, more than 40% of all jobs in the United States are low income jobs.
#14 According to the U.S. Census Bureau, the middle class is taking home a smaller share of the overall income pie than has ever been recorded before.
#15 There are now 20.2 million Americans that spend more than half of their incomes on housing. That represents a 46 percent increase from 2001.
#16 Low income families spend about 8.6 percent of their incomes on gasoline. Other families spend about 2.1 percent.
#17 In 1999, 64.1 percent of all Americans were covered by employment-based health insurance. Today, only 55.1 percent are covered by employment-based health insurance.
#18 According to one survey, 77 percent of all Americans are now living paycheck to paycheck at least part of the time.
#19 Millions of working poor families in America end up taking on debt in a desperate attempt to stay afloat, but before too long they find themselves in a debt trap that they can never escape. According to a recent article in the New York Times, the average debt burden for U.S. households that earn $20,000 a year or less “more than doubled to $26,000 between 2001 and 2010“.
#20 In 1989, the debt to income ratio of the average American family was about 58 percent. Today it is up to 154 percent.
You can find the rest of the list right here.
The working poor simply cannot afford to be paying hundreds of dollars in fees to the big banks each year just to use the money that they worked so very hard to earn.
Unfortunately, we seem to be living during a time when the big financial institutions will squeeze every nickel that they possibly can out of average Americans no matter how high the human cost is.
If the economy is improving, then why are many of the largest retail chains in America closing hundreds of stores? When I was growing up, Sears, J.C. Penney, Best Buy and RadioShack were all considered to be unstoppable retail powerhouses. But now it is being projected that all of them will close hundreds of stores before the end of 2013. Even Wal-Mart is running into problems. A recent internal Wal-Mart memo that was leaked to Bloomberg described February sales as a “total disaster”. So why is this happening? Why are major retail chains all over America collapsing? Is the “retail apocalypse” upon us? Well, the truth is that this is just another sign that the U.S. economy is falling apart right in front of our eyes. Incomes are declining, taxes are going up, government dependence is at an all-time high, and according to the Bureau of Labor Statistics the percentage of the U.S. labor force that is employed has been steadily falling since 2006. The top 10% of all income earners in the U.S. are still doing very well, but most U.S. consumers are either flat broke or are drowning in debt. The large disposable incomes that the big retail chains have depended upon in the past simply are not there anymore. So retail chains all over the United States are now closing up unprofitable stores. This is especially true in low income areas.
When you step back and take a look at the bigger picture, the rapid decline of some of our largest retail chains really is stunning.
It is happening already in some areas, but soon half empty malls and boarded up storefronts will litter the landscapes of cities all over America.
Just check out some of these store closing numbers for 2013. These numbers are from a recent Yahoo Finance article…
Forecast store closings: 200 to 250
Sears Holding Corp.
Forecast store closings: Kmart 175 to 225, Sears 100 to 125
Forecast store closings: 300 to 350
Forecast store closings: 125 to 150
Barnes & Noble
Forecast store closings: 190 to 240, per company comments
Forecast store closings: 500 to 600
Forecast store closings: 150 to 175
Forecast store closings: 450 to 550
The RadioShack in a nearby town just closed up where I live. This is all happening so fast that it is hard to believe.
But the truth is that those store closings are not the entire story. When you dig deeper you find a lot more retailers that are in trouble.
For example, Blockbuster recently announced that this year they will be closing about 300 stores and eliminating about 3,000 jobs.
Toy manufacturer Hasbro recently announced that they will be reducing the size of their workforce by about 10 percent.
Even Wal-Mart is going through a tough stretch right now. According to documents that were leaked to Bloomberg, Wal-Mart is having an absolutely disastrous February…
Wal-Mart Stores Inc. had the worst sales start to a month in seven years as payroll-tax increases hit shoppers already battling a slow economy, according to internal e-mails obtained by Bloomberg News.
“In case you haven’t seen a sales report these days, February MTD sales are a total disaster,” Jerry Murray, Wal- Mart’s vice president of finance and logistics, said in a Feb. 12 e-mail to other executives, referring to month-to-date sales. “The worst start to a month I have seen in my ~7 years with the company.”
So what in the world is going on here?
The mainstream media continues to proclaim that we are experiencing a robust “economic recovery”, but at the same time there are a whole host of indications that things are continually getting worse.
Even global cell phone sales actually declined slightly in 2012. That was the first time that has happened since the last recession.
Perhaps it is time that we faced the truth. The middle class is shrinking, incomes are declining and there are not nearly as many jobs as there used to be.
Mort Zuckerman pointed this out in a recent article in the Wall Street Journal…
The U.S. labor market, which peaked in November 2007 when there were 139,143,000 jobs, now encompasses only 132,705,000 workers, a drop of 6.4 million jobs from the peak. The only work that has increased is part-time, and that is because it allows employers to reduce costs through a diminished benefit package or none at all.
So how can the mainstream media be talking about how “good” things are if we still have 6.4 million fewer jobs than we had back in November 2007?
And sadly, things may soon be getting a lot worse. If Congress does not do anything about the “sequester”, millions of federal workers may shortly be facing some very painful furloughs according to CNN…
Federal workers could start facing furloughs as early as April, according to federal agencies trying to prepare for the worst.
Unless Congress steps in, some $85 billion in massive spending reductions will hit the federal government, doling out furloughs to much of the nation’s 2.1 million federal workforce, experts say.
If you still live in an area of the country where the stores and the restaurants are booming, you should be very thankful because that is not the reality for most of the country.
I often write about the stunning economic decline of major cities such as Detroit, but there are huge sections of rural America that are in even worse shape than Detroit in many ways.
For example, many Indian reservations all over America have been shamefully neglected by the federal government and have become hotbeds for crime, drugs and poverty.
Business Insider recently profiled the Wind River Indian reservation in western Wyoming. The following is a brief excerpt from that outstanding article…
The Wind River Indian Reservation is not an easy place to get to, but I had to see it for myself.
Thirty-five-hundred square miles of prairie and mountains in western Wyoming, the reservation is home to bitter ancestral enemies: the Eastern Shoshone and Northern Arapaho tribes.
Even among reservations, it’s renowned for brutal crime, widespread drug use, and legal dumping of toxic waste.
You can see some amazing photos of the Wind River Indian reservation right here.
It is hard to believe that there are places like that in America, but the truth is that conditions like that are spreading to more U.S. communities with each passing day.
We are a nation that is in an advanced state of decline. But as long as the financial markets are okay, our leaders don’t seem too concerned about the suffering that everyone else is going through.
In fact, former Federal Reserve Chairman Alan Greenspan essentially admitted as much during a recent interview with CNBC. The following is how a Zero Hedge article summarized that interview…
Starting at around 1:50, Greenspan states the odds of sequester occurring are very high – in fact, the playdough-faced ex-Chair-head notes, “I find it very difficult to find a scenario in which [the sequester] doesn’t happen” But when asked how this will affect the economy, Awkward Alan is unusually clearly spoken – “the issue is how does it affect the stock market.”
While not so many of our leaders have taken the path to direct truthiness, Greenspan somewhat shocks a Botox’d and babbling Bartiromo when he admits “the stock market is the key player in the game of economic growth.”
Bartiromo shifts uncomfortably in her seat, strokes her imaginary beard and stares blankly as Greenspan explains that while the sequester will have a real effect on the real economy, “if the stock market can hold up through this, then the effect will be rather minor.”
Do you see?
As long as the stock market is moving higher they think that everything is just fine and dandy.
And the Obama administration?
They continue to pursue the same policies that got us into this mess.
Their idea of “economic reform” is to threaten to sue businesses that do not hire ex-convicts.
And of course now that Obama has been re-elected he is putting a tremendous amount of effort into “stimulating the economy”.
For example, he spent this weekend golfing in Florida, and the Obamas recently spent about 20 million taxpayer dollars vacationing in Hawaii.
Meanwhile, the U.S. economy is getting worse with each passing day.
If you doubt that economic conditions are getting worse, please read this article: “Show This To Anyone That Believes That ‘Things Are Getting Better’ In America“.
When you look at the cold, hard numbers, it is undeniable what is happening to America.
And our leaders are not doing anything to fix our problems. In fact, most of the time they are just making things worse.
So buckle up and get prepared. We are in for very bumpy ride, and this is only just the beginning.
America absolutely loves Wal-Mart. 100 million customers visit Wal-Mart every single week in this country. But is Wal-Mart good for America? That is a question that most people never stop and ask. Most of us love shopping in big, clean stores that are packed with super cheap merchandise, but the truth is that Wal-Mart is destroying America in a lot of ways. As you will see below, Wal-Mart has destroyed tens of thousands of small businesses and countless manufacturing jobs over the past couple of decades. Wal-Mart has become a gigantic retail behemoth that sells five times more stuff than any other retailer in the United States. Unfortunately, a large percentage of all the stuff sold at Wal-Mart is made overseas. What that is costing the U.S. economy in terms of lost jobs and lost revenue is incalculable. But Wal-Mart is a perfect example of where our economic system is headed. Our economy is becoming completely and totally dominated by highly centralized monolithic predator corporations that ruthlessly crush all competition and that will stoop to just about anything in order to cut costs. In the future, will we all be working for gigantic communal entities that funnel all of the wealth and economic rewards to a very tiny elite? That sounds very much like how communist China works, and red-blooded Americans should want no part of that. America is supposed to be about free enterprise and competition and working together to build up this country, and Wal-Mart is destroying all of that.
The following are 20 facts about Wal-Mart that will absolutely shock you….
#1 The average U.S. family now spends more than $4000 a year at Wal-Mart.
#2 In 2010, Wal-Mart had revenues of 421 billion dollars. That amount was greater than the GDP of 170 different countries including Norway, Venezuela and the United Arab Emirates.
#3 If Wal-Mart was a nation, it would have the 23rd largest GDP in the world.
#4 Wal-Mart now sells more groceries than anyone else in America does. In the United States today, one out of every four grocery dollars is spent at Wal-Mart.
#5 Amazingly, 100 million customers shop at Wal-Mart every single week.
#6 Wal-Mart has opened more than 1,100 “supercenters” since 2005 alone.
#7 Today, Wal-Mart has more than 2 million employees.
#8 If Wal-Mart was an army, it would be the second largest military on the planet behind China.
#9 Wal-Mart is the largest employer in 25 different U.S. states.
#10 According to the Economic Policy Institute, trade between Wal-Mart and China resulted in the loss of 133,000 manufacturing jobs in the United States between 2001 and 2006.
#11 The CEO of Wal-Mart makes more in a single hour than a full-time Wal-Mart associate makes in an entire year.
#12 Tens of thousands of Wal-Mart employees and their children are enrolled in Medicaid and are dependent on the government for healthcare.
#13 Between 2001 and 2007, the value of products that Wal-Mart imported from China grew from $9 billion to $27 billion.
#14 Amazingly, 96 percent of all Americans now live within 20 miles of a Wal-Mart.
#15 The number of “independent retailers” in the United States declined by 60,000 between 1992 and 2007.
#16 According to the Center for Responsive Politics, Wal-Mart spent 7.8 million dollars on political lobbying during 2011. That number does not even include campaign contributions.
#17 Today, Wal-Mart has five times the sales of the second largest U.S. retailer (Costco).
#18 The combined net worth of six members of the Walton family is roughly equal to the combined net worth of the poorest 30 percent of all Americans.
All over the country, independent retailers are going out of business because they cannot compete with Wal-Mart and their super cheap Chinese products. Often communities will give Wal-Mart huge tax breaks just to move in to their areas. But what many communities don’t take into account is that the introduction of a Wal-Mart is often absolutely devastating to small businesses….
A study of small and rural towns in Iowa showed lost sales for local businesses ranging from -17.2% in small towns to -61.4% in rural areas, amounting to a total dollar loss of $2.46 BILLION over a 13-year period.
When we buy stuff made by people working for slave labor wages in China, we destroy good paying American jobs and we make America poorer. This is a point that I have tried to make over and over.
Wal-Mart often tells one thing to the public and then does another thing in private. Sadly, the truth is that Wal-Mart does not care about U.S. manufacturing jobs. Wal-Mart just wants to get products as cheaply as they possibly can, and most of the time that means getting them from China.
Just check out this first-hand testimony from an 81-year-old retired apparel manufacturer….
I was president of the Southwestern Apparel Manufacturers Association. There was a meeting sometime between 1985 and 1990. Walmart had contacted our organization and asked if they could meet with us at our beautiful Apparel Mart we had here in Dallas, which has now been razed, because all the independent merchants don’t exist that used to come to it. Two people from Walmart came down and they said they were going to be sourcing goods from overseas and we would have to meet those prices for consumer products and to get ready for it—we are going to be sourcing the world. Walmart was the only company that came out and said this.
It was sort of shocking: I was selling them some merchandise at the time. On the back of their trucks it was saying “Bring it Back to America!” They had the big “keep it in America” program going at that time on the big signs in the stores. Meanwhile when I reminded the buyer of that, she told me, “that is just for domestic consumption, we’re going to buy at the cheapest we can anywhere on earth.”
As I have written about previously, the United States has lost more than 56,000 manufacturing facilities since 2001.
We are losing millions of good jobs that cannot be replaced. If you can believe it, the United States has actually lost an average of about 50,000 manufacturing jobs a month since China joined the World Trade Organization in 2001.
Last year, the U.S. trade deficit with China was the biggest trade deficit that one nation has had with another nation in the history of the world, and Wal-Mart played a huge role in that.
In fact, Wal-Mart has actually been forcing some U.S. manufacturers to pack up and move overseas. The following is from a recent article by Amy Traub….
Walmart’s market power is so immense that the even the largest suppliers must comply with its demands for lower and lower prices because they cannot afford to have their goods taken off its shelves. Companies that used to manufacture products in the United States, from Levi’s jeans to lock maker Master Lock, were pressured to shut their U.S. factories and moved manufacturing abroad to meet Walmart’s demand for low prices.
Unfortunately, the vast wealth that Wal-Mart is sucking out of our communities is not put back into our communities. The profits are funneled out to Wal-Mart executives and shareholders. We may enjoy the low prices, but very little of the money that we give to Wal-Mart gets recycled in our local areas.
In the old days, you could actually support a family selling electronics or running a general store. But you can’t support a family working at Wal-Mart. The vast majority of the jobs that Wal-Mart creates are very low paying. Large numbers of Wal-Mart employees are actually on welfare, and this is part of the reason why we have seen such an explosion in the number of the working poor in America.
At this point, more than 40 percent of all jobs in America are low wage jobs and the middle class is rapidly disappearing.
If we do not support American jobs and American manufacturers they will continue to go away and the welfare rolls in this country will continue to explode.
There is not going to be any prosperity in this country without jobs. Unfortunately, most Americans simply do not understand how good jobs are being systematically destroyed in America every single day.
The path that America is headed on today is only going to end in complete and total disaster. We are being transformed from a wealthy nation into a poor nation. In the end, we will be dominated by a very tiny elite and everyone else will either be among the working poor or will be totally dependent on the government.
Our system is supposed to be about open, honest competition. But that is not what Wal-Mart is about. Wal-Mart is about crushing small businesses and manufacturers here in America and getting us all to buy their super cheap Chinese-made goods.
So what do all of you think about Wal-Mart? Please feel free to post a comment with your thoughts below….