According to the Labor Department, the number of job openings in the United States just plunged by the largest amount we have seen in nearly four years. The latest JOLTS report shows that the number of job openings has declined by 538,000, and that is a really big number for just a single month. But we shouldn’t be surprised by this at all, because it is perfectly consistent with all of the other dismal economic numbers that have been coming in recently. An economic slowdown is here, and many believe that it is just getting started.
Very briefly, let’s review some of the reasons why we should expect to see the employment numbers get worse. As the economy slows down, goods begin to pile up in our warehouses, and that is precisely what the numbers show. In fact, the inventory to sales ratio in the U.S. has now increased for five months in a row.
Fewer sales should result in less stuff being shipped around the nation by freight, rail and air, and this is yet another thing that we see happening right now. Overall, U.S. freight shipment volume has dropped for three months in a row.
Once businesses realize that economic conditions have changed, then they start reducing the number of job openings and laying off workers. That is why employment statistics are often referred to as “trailing indicators”. The employment numbers don’t usually start to go down until other indicators start dropping first.
And without a doubt, the employment numbers are starting to move. Continuing jobless claims have been rising at the most rapid pace in 10 years, and U.S. businesses have been adding jobs at the slowest pace in 18 months.
Job openings, a measure of labor demand, tumbled by 538,000 to a seasonally adjusted 7.1 million, the Labor Department said in its monthly Job Openings and Labor Turnover Survey, or JOLTS, report on Tuesday. The drop was the biggest since August 2015.
That is a really dreadful number, and there is no way to spin it to make it look good.
One factor that is shifting the employment environment is all of the minimum wage laws that are being passed around the country.
In what has become just one more example of government intervention going the exact opposite of what socialists intend, minimum wage laws are driving a “payroll tsunami.” Small businesses are being forced to lay off workers in order to comply with a law demanding an increase in wages.
This isn’t all that surprising. Economists, small business owners, and other analysts have said that the net result of higher wages is a loss of jobs. And small businesses, who don’t have the capital or return that large corporations do, are feeling the proverbial pinch. According to Fox News, several mom-and-pop coffee shops and restaurants, are responding by cutting hours, eliminating jobs or closing down entirely because they can’t keep up with rising wages under the law.
My very first job was flipping burgers for McDonald’s, and I made $3.35 an hour doing it. As a teenager, I was grateful to have such a job, but now such minimum wage jobs are in danger. Wal-Mart and other major corporations are already making extensive use of robots to perform basic tasks, and making human workers more expensive is going to hurt those at the bottom of the economic food chain the most.
But for the moment, things are still relatively stable. Most Americans still seem to believe that the bubble of debt-fueled economic “prosperity” that we are currently enjoying is going to continue for the foreseeable future, and they are spending money as if tomorrow will never come.
According to Zero Hedge, U.S. consumer credit has now surged past the 4 trillion dollar mark…
After a few months of wild swings in mid 2018, in February US consumer credit continued to normalize, rising by $15.2 billion, slightly below the $17 billion expected, following January’s $17.7 billion increase. The continued increase in borrowings saw total credit storm above $4 trillion, and hit a new all time high of $4.045 trillion on the back of a America’s ongoing love affair with auto and student loans, and of course credit cards.
We better hope that the U.S. economy is able to pull out of this new slowdown, because most of us are living right on the edge financially.
Sadly, we never seem to learn. The same mistakes that we made last time around are all happening again, and Americans are completely and totally unprepared for what is coming.
And the warnings are all around us. On Tuesday, the IMF downgraded their forecast for global economic growth for the third time in six months. Commenting on this downgrade, IMF executive director Christine Lagarde noted that this is a “delicate moment” for the global economy…
Christine Lagarde, the IMF’s executive director, said the global economy is in a “delicate moment.”
“Only two years ago, 75% of the global economy experienced an upswing,” Lagarde said, according to the text of a speech she’s due to give at the US Chamber of Commerce. “For this year, we expect 70% of the global economy to experience a slowdown in growth.”
It is not often that I agree with a globalist like Christine Lagarde, but she is quite right in saying that this is a “delicate moment”.
The economic numbers just continue to get worse and worse, and at this point it has become exceedingly clear that an economic slowdown is happening. In fact, even the chair of the Federal Reserve is using the term “slowdown” to describe what is taking place. But of course many are still hoping that the U.S. economy can pull out of this slump and avoid the sort of crippling recession that we experienced in 2008. Unfortunately, that may be really tough because the entire global economy is slowing down right now. Our world is more interconnected than ever before, and what happens on one side of the planet is invariably going to affect the other side of the planet. Some parts of the globe are already mired in deep economic problems, and the U.S. appears to be following down the same path.
If you still think that the economy is in “good shape”, please read over the following list very carefully.
The following are 14 very alarming numbers that reveal the true state of the economy…
#1 Continuing jobless claims are rising at the fastest pace in 10 years.
#2 U.S. businesses are adding jobs at the slowest pace in 18 months.
#3 General Motors, Ford, Nissan and Fiat Chrysler all reported sales declines of at least 5 percent on a year over year basis in March.
#4 Tesla vehicle deliveries were down a whopping 31 percent during the first quarter of 2019.
#14 Overall, U.S. economic numbers are off to their worst start for a year since 2008.
We didn’t see economic numbers like this last year.
But now things have clearly changed. It is starting to feel more like 2008 with each passing day, and this is a point that Mac Slavo made in his most recent article…
The signs of yet another economic recession are everywhere. In fact, it seems hard to find any positive economic news anymore, even though a mere few months ago, it was difficult to find a report signaling the United States might be headed for some turmoil.
These days, many people get offended at the thought that the U.S. economy is heading for trouble. But the truth is that we have been heading for trouble for a very long time.
Our economy is built on a foundation of sand. More specifically, we have borrowed our way into “prosperity”.
The other day, I wrote an article about our $22,000,000,000,000 national debt. It is the biggest single debt in the history of the world, and we continue to add to it at a rate that is absolutely insane. In fact, our 234 billion dollar deficit in February broke the all-time record for a single month. If we continue to do this, there is no way that our story ends well.
But that 22 trillion dollar debt is only a fraction of our overall debt.
When historians look back on this time in history, they will not be surprised that our society ultimately collapsed. What will surprise them is that it took so long for it to do so.
Sometimes I get criticized for urging people to get prepared. But those that really deserve the criticism are those that are assuring everyone that everything is going to be just fine. If we got the smartest minds in the entire country together and treated this like a major national emergency, perhaps we could find a way to engineer some sort of a soft landing when this debt bubble bursts.
But as it stands, there is no plan and our long-term problems get worse with each passing day. Our economy is headed for a crash of epic proportions, and it isn’t going to matter who is in power in Washington when it happens.
And at the rate that our economy is currently slowing down, America may become an economic horror show a lot sooner than many people had anticipated.
Even mainstream economists are admitting that economic activity is slowing down. And at this point that fact would be very difficult to deny, because the numbers are very clear. We haven’t faced anything like this in a decade, and many are deeply concerned about what is coming next. Will it be just another recession, or will it be an even greater crisis than we faced in 2008? According to Bloomberg Economics, the global economy experienced a “sharp loss of speed” over the course of 2008 and global economic conditions are now “the weakest since the global financial crisis”…
The global economy’s sharp loss of speed through 2018 has left the pace of expansion the weakest since the global financial crisis a decade ago, according to Bloomberg Economics.
Its new GDP tracker puts world growth at 2.1 percent on a quarter-on-quarter annualized basis, down from about 4 percent in the middle of last year. While there’s a chance that the economy may find a foothold and arrest the slowdown, “the risk is that downward momentum will be self-sustaining,” say economists Dan Hanson and Tom Orlik.
This is definitely the worst condition that the global economy has been in since I started The Economic Collapse Blog, and I am personally very alarmed about where things are heading. The tremendous economic optimism of early 2018 has given way to a tremendous wave of pessimism, and the speed at which the economic environment is changing has stunned a lot of the experts.
In fact, Bloomberg economists Dan Hanson and Tom Orlik openly admit that they are “surprised” by how quickly the global economy has shifted…
“The cyclical upswing that took hold of the global economy in mid-2017 was never going to last. Even so, the extent of the slowdown since late last year has surprised many economists, including us.”
Of course the U.S. has not been immune from the changes. The U.S. economy is rapidly slowing down as well, and this is something that I have been heavily documenting on my website.
And now we have just received more confirmation that the economy is decelerating. The Atlanta Fed has just updated their GDPNow model yet again, and with this new revision they are now projecting that the U.S. economy will grow at a rate of just 0.2 percent during the first quarter of 2019…
Moments ago we got another confirmation of this, when following the latest retail sales report which saw a dramatic cut to December retail sales even as January surprised modestly to the upside, the Atlanta Fed slashed its Q1 GDP nowcast, and after rebounding modestly from 0.3% to 0.5% a week ago, it has once again slumped, and is now at the lowest recorded level, and just 0.2% away from economic contraction.
This is how the AtlantaFed justified its latest Q1 GDP cut, which as of March 11 was just 0.2 percent, down from 0.5 percent on March 8: “After this morning’s retail sales report from the U.S. Census Bureau, the nowcast of first-quarter real personal consumption expenditures growth declined from 1.5 percent to 1.0 percent.”
In other words, we are just a razor thin margin away from entering an economic contraction.
Last week, we learned that U.S. job cut announcements were up 117 percent in February when compared to last year. All of the economic momentum is in a negative direction right now, and it is going to be exceedingly difficult to avert a recession at this point.
And of course a lot of analysts believe that what is coming will be a whole lot worse than just a recession. The greatest debt bubble in the entire history of our planet is in the process of bursting, and the consequences are going to be absolutely horrific. I really like how financial expert Egon von Greyerz recently made this point…
People must understand that the world has never faced risk of this magnitude. We are now in the final seconds of the global mega bubble, the likes of which the world has never seen before. What will happen next will be worse than the fall of the Roman Empire, much worse than the South Sea and Mississippi Bubbles, and will create a disaster that will dwarf the Great Depression of the 1930s.
The problem is simple to define and is all based around debts and liabilities. At the beginning of this century, global debt was $80 trillion. When the Great Financial Crisis started in 2006, global debt had gone up by 56% to $125 trillion. Today it is $250 trillion.
There is no way that a 250 trillion dollar bubble is going to burst in an orderly fashion. Essentially, we are looking at the sort of apocalyptic financial scenario that I have been warning about for a long time, and most people have no idea that it is coming.
And if people only listened to the financial authorities, it would be easy to get the impression that everything is going to be just fine.
For example, Fed Chair Jay Powell just told 60 Minutes that the outlook for the U.S. economy “is a favorable one”. The following comes from Fox Business…
Jay Powell, the head of the Federal Reserve, says he does not see a recession hitting the U.S. economy anytime soon.
“The outlook for our economy, in my view, is a favorable one,” Powell said Sunday in an interview with CBS’s Scott Pelley for “60 Minutes.”
If you are tempted to believe Powell, let me remind you of what former Fed Chair Ben Bernanke told Congress in early 2008…
“The U.S. economy remains extraordinarily resilient,” the U.S. central bank chief said in answering questions after testifying before the House of Representatives Budget Committee.
Bernanke added that growth will be worse this year. “We currently see the economy as continuing to grow, but growing at a relatively slow pace, particularly in the first half of this year,” he said.
Of course we all remember what happened next. The U.S. economy plunged into the worst economic downturn since the Great Depression of the 1930s, and we are still dealing with the aftermath of that crisis to this day.
Nobody is going to ring a bell when the next recession starts. It is just going to happen, and just like last time, most Americans are going to be blindsided by it.
We have not seen anything like this since the last recession. Layoff announcements are coming fast and furious now, and the speed at which workers are being laid off is shocking a lot of people. In this day and age, big companies have absolutely no loyalty to their workers. The moment it becomes financially advantageous for them to start laying off employees, most of them will do it in a heartbeat. I personally know someone that was an extremely hard worker and that put in extra time and effort for his company for many, many years, but he was just laid off because that is what the number crunchers determined was the right move. It is a cold, cruel world, and as we witnessed back in 2008, job losses can occur at a pace that is absolutely breathtaking when a recession strikes.
Even though it is the shortest month of the year, U.S. employers announced plans to cut 76,835 jobs last month, according to a report from Challenger, Gray & Christmas. That’s a 117 percent year-over-year increase, and a 45 percent increase over January’s numbers.
You have to go all the way back to 2015 to find a month that was as bad as February.
Are you starting to see that the momentum for the economy has clearly shifted?
The economic news just keeps getting worse and worse as we roll through 2019, and the retail sector is being hit harder than just about anyone else.
The retail sector had the most planned job cuts, with 41,201 so far this year – the highest January-February total since 2009. The industrial goods sector – including some manufacturers – followed with nearly 32,000 cuts announced during the same time period.
The primary reasons employers cited for eliminating positions were restructuring and bankruptcy.
This is being called a “retail apocalypse”, and we are on pace to absolutely shatter the all-time record for store closings in a single year.
At this point, retailers have already announced the closure of more than 5,300 stores. The following list of retailers that have announced that they are shutting down at least 10 locations comes from Business Insider…
And in my article yesterday, I noted that General Motors is shutting down four major production plants this year.
It’s really happening.
The bubble of debt-fueled false prosperity that we have been enjoying is disappearing, and the road ahead is going to be really rough.
On Thursday we also learned that U.S. household wealth has been plummeting. In fact, the fourth quarter of 2018 was the worst quarter for household balance sheets since the last financial crisis…
Americans’ net worth fell at the highest level since the financial crisis in the fourth quarter of 2018 as sliding stock market prices ate into the household balance sheet.
Net worth dropped to $104.3 trillion as the year came to an end, a decrease of $3.73 trillion from the third quarter, according to figures released Thursday by the Federal Reserve. The fall amounted to a drop of 3.4 percent.
An increasing number of families are feeling financially squeezed these days, and many of them are accumulating large amounts of debt as they attempt to keep things going.
But for a lot of Americans that are currently drowning in debt, the end of the road has already been reached.
Corporations, individuals and the federal government continue to rack up debt at a rate that is far faster than the overall rate of economic growth. We are literally drowning in red ink from sea to shining sea, and yet we just can’t help ourselves. Consumer credit has doubled since the year 2000. Student loan debt has doubled over the course of the past decade. Business debt has doubled since 2006. And of course the debt of the federal government has doubled since 2007. Anyone that believes that this is “sustainable” in any way, shape or form is crazy. We have accumulated the greatest mountain of debt that the world has ever seen, and yet despite all of the warnings we just continue to race forward into financial oblivion. There is no possible way that this is going to end well.
Just the other day, a financial story that USA Today posted really got my attention. It contained charts and graphs that showed that business debt in the U.S. had doubled since 2006. I knew that things were bad, but I didn’t know that they were this bad. Back in 2006, just prior to the last major economic downturn, U.S. nonfinancial companies had a total of about 2.6 trillion dollars of debt. Now, that total has skyrocketed to 5.8 trillion…
Companies are sitting on a record $1.82 trillion in cash. That might sound impressive until you hear companies owe three times more – $5.8 trillion, according to a new report from Standard & Poor’s Ratings Services.
Debt levels are soaring at U.S. non-financial companies so quickly – total debt outstanding rose $650 billion in 2014, which is six times faster than the $100 billion in added cash.
So are we in better condition to handle an economic crisis than we were the last time, or are we in worse shape?
Let’s look at another category of debt. According to new data that just came out, the total amount of student loan debt in the U.S. is up to a staggering 1.2 trillion dollars. That total has more than doubled over the past decade…
New data released by The Associated Press shows student loan debt is over $1.2 trillion, which is more than double the amount of a decade ago.
Students are facing an average of $35,000 in debt, that’s the highest of any graduating class in U.S. history. A senior at University of Colorado, Colorado Springs, Jon Cheek, knows the struggle first hand.
“It’s been a pretty big concern, I work while I go to school. I applied for a bunch of scholarships and done everything I can to try and keep it low,” said Cheek.
And of course it isn’t just student loan debt. American consumers have had a love affair with debt that stretches back for decades. As the chart below demonstrates, overall consumer credit has more than doubled since the year 2000…
If our paychecks were increasing at this same pace, that would be one thing. But they aren’t. In fact, real median household income is actually lower today than it was just prior to the last economic crisis.
So American households should actually be cutting back on debt. But instead, they are just piling on more debt, and the financial predators are becoming even more creative. In a previous article, I discussed how many auto loans are now being stretched out for seven years. At this point, the number of auto loans that exceed 72 months is at an all-time high…
The average new car loan has reached a record 67 months, reports Experian, the Ireland-based information-services company. The percentage of loans with terms of 73 to 84 months also reached a new high of 29.5% in the first quarter of 2015, up from 24.9% a year earlier.
Long-term used-vehicle loans also broke records with loan terms of 73 to 84 months reaching 16% in the first quarter 2015, up from 12.94% — also the highest on record.
When will we learn?
The crash of 2008 should have been a wake up call.
We should have acknowledged our mistakes and we should have started doing things very differently.
But instead, we just kept on making the exact same mistakes. In fact, our long-term financial problems have continued to accelerate since the last recession. Just look at what has happened to our national debt. Just prior to the last recession, the U.S. national debt was sitting at approximately 9 trillion dollars. Today, it is over 18 trillion dollars…
Our debt has grown so large that we will never be able to get out from under it. This is something that I covered in my recent article entitled “It Is Mathematically Impossible To Pay Off All Of Our Debt“. Because of our recklessness, our children, our grandchildren and all future generations of Americans are consigned to a lifetime of debt slavery. What we have done to them is beyond criminal. If we lived in a just society, a whole bunch of people would be going to prison for the rest of their lives over this.
During fiscal year 2014, the debt of the federal government increased by more than a trillion dollars. But in addition to that, the federal government has more than seven trillion dollars of debt that must be “rolled over” every year. In other words, the government must issue more than seven trillion dollars of new debt just to pay off old debts that are coming due.
As long as the rest of the world continues to lend us enormous mountains of money at ridiculously low interest rates, we can continue to keep our heads above the water. But this can change at any time. And once it does, interest rates will rise. If the average rate of interest on U.S. government debt was to return to the long-term average, we would very quickly find ourselves spending more than a trillion dollars a year just on interest on the national debt.
The debt-fueled prosperity that we are enjoying now is not real. It is a false prosperity that has been purchased by selling future generations into debt slavery. We have mortgaged the future to make our own lives better.
We are addicts. We are addicted to debt, and no matter how many warnings we receive, we just can’t help ourselves.
According to a study that was just released by Boston Consulting Group, the wealthiest one percent now own 39 percent of all the wealth in the world. Meanwhile, the bottom 50 percent only own 1 percent of all the wealth in the world combined. The global financial system has been designed to funnel wealth to the very top, and the gap between the wealthy and the poor continues to expand at a frightening pace. The global elite continue to hoard wealth and heap together enormous mountains of treasure in these troubled days even though the economic suffering around the planet continues to grow. So exactly how have the global elite accumulated so much wealth? Well, one of the primary ways is through the use of debt. As I have written about previously, there is about 190 trillion dollars of debt in the world but global GDP is only about 70 trillion dollars. Our debt-based global financial system systematically transfers wealth from us and our governments into the hands of the global elite. And of course the gigantic banks and corporations that the elite control are constantly gobbling up everything of value that they can find: natural resources, profitable small businesses, real estate, politicians, etc. Money, power, ownership and control are becoming very, very tightly concentrated at the top of the food chain, and that is a very dangerous thing for humanity. When too much money and power gets into too few hands, it almost always results in tyranny.
What will eventually happen when the global elite have ALL the wealth?
Will the rest of us work as serfs in a system that they have iron-fisted control over?
And what if they decide that they don’t really need billions of people working for them? Will they decide to implement population control measures in order to reduce the number of “useless eaters”? It is already happening in China and other highly centralized societies.
When all of the economic rewards of a society go to a very small handful of people, it tends to be very destabilizing. We have seen this again and again throughout history.
When people have everything taken away from them and they have nothing left to lose, they tend to become very desperate. And right now we are rapidly hurtling toward a time of great global instability. Anger and frustration are growing all over the globe, and the rate at which the gap between the wealthy and the poor is widening seems to be accelerating. Just check out these numbers…
-The wealthiest 1 percent of the global population now owns 39 percent of all the wealth on the planet.
-According to a report that was released last summer, the global elite have up to 32 TRILLION dollars stashed in offshore banks around the planet.
-According to a study conducted by Credit Suisse, the bottom two-thirds of the global population owns just 3.3% of all the wealth.
-A study by the World Institute for Development Economics Research discovered that the bottom half of the world population owns approximately 1 percent of all global wealth.
-It is estimated that the entire continent of Africa only owns approximately 1 percent of the total wealth of the world.
-Approximately 1 billion people throughout the world go to bed hungry each night.
In the world that we live in, money equals power. And the more money that the top one percent accumulate, the more power they will accumulate as well.
So exactly who are the top one percent? I discussed this at length in my previous article entitled “Who Runs The World? Solid Proof That A Core Group Of Wealthy Elitists Is Pulling The Strings“. The global elite are absolutely obsessed with power and control and they have been working to implement their agenda for a very long time. In the end, they hope to unite the entire planet under a monolithic global system that they control. They are actually quite open about this – it is just that most people do not want to believe it.
The gap between the wealthy and the poor is rapidly growing in the United States as well. Sadly, this means that the middle class is steadily disappearing as the ranks of those that are living in poverty continues to increase.
But of course not everyone is doing badly in the U.S. right now. In fact, those that own stocks have had lots of reasons to celebrate in recent months.
So who owns stocks?
Well, the wealthy do of course. In fact, approximately 60 percent of all individually held stocks are owned by the top 5 percent of all Americans.
During the last recession, Americans lost 16 trillion dollars of wealth. Since then, about 45 percent of that wealth has been “recovered”, but the vast majority of that “recovery” has been due to rising stock prices. The following comes from a recent Washington Post article…
From the peak of the boom to the bottom of the bust, households watched a total of $16 trillion in wealth disappear amid sinking stock prices and the rubble of the real estate market. Since then, Americans have only been able to recapture 45 percent of that amount on average, after adjusting for inflation and population growth, according to the report from the St. Louis Fed released Thursday.
In addition, the report showed most of the improvement was due to gains in the stock market, which primarily benefit wealthy families. That means the recovery for other households has been even weaker.
“A conclusion that the financial damage of the crisis and recession largely has been repaired is not justified,” the report stated.
Once upon a time, the United States had the largest and most thriving middle class in the history of the world. That was a great thing. But now the middle class is being destroyed and government dependence has surged to an all-time high.
The following are some of the incredible statistics that show how wide the gap between the wealthy and the poor in America is becoming…
-The wealthiest 1 percent of all Americans now own more than a third of all the wealth in the United States.
The Dow is at a record high and so are corporate profits – so why does it feel like most of the country is deeply suffering right now? Real household income is the lowest that it has been in a decade, poverty is absolutely soaring, 47 million Americans are on food stamps and the middle class is being systematically destroyed. How can big corporations be doing so well while most American families are having such a hard time? Isn’t their wealth supposed to “trickle down” to the rest of us? Unfortunately, that is not how the real world works. Today, most big corporations are trying to minimize the number of “expensive” American workers on their payrolls as much as they can. If the big corporation that is employing you can figure out a way to replace you with a worker in China or with a robot, it will probably do it. Corporations are in existence to maximize wealth for their shareholders, and most of the time the largest corporations are dominated by the monopoly men of the global elite. Over the decades, the politicians that have their campaigns funded by these monopoly men have rigged the game so that the big corporations are able to easily dominate everything. But this was never what those that founded this country intended. America was supposed to be a place where the power of collectivist institutions would be greatly limited, and individuals and small businesses would be free to compete in a capitalist system that would reward anyone that had a good idea and that was willing to work hard. But today, our economy is completely and totally dominated by a massively bloated federal government and by absolutely gigantic predator corporations that are greatly favored by our massively bloated federal government. Our founders tried to warn us about the dangers of allowing government, banks and corporations to accumulate too much power, but we didn’t listen. Now they dominate everything, and the rest of us are fighting for table scraps.
In early America, most states had strict laws governing the size and scope of corporations. Individuals and small businesses thrived in such an environment, and the United States experienced a period of explosive economic growth. We showed the rest of the world that capitalism really works, and we eventually built the largest middle class that the world had ever seen.
But now we have replaced capitalism with something that I like to call “corporatism”. In many ways, it shares a lot of characteristics with communism, and that is why nations such as communist China have embraced it so readily. Under “corporatism”, monolithic predator corporations run around sucking up as much wealth and economic power as they possibly can. Most individuals and small businesses cannot compete and end up getting absorbed by the corporations. These mammoth collectivist institutions are in private hands rather than in government hands (as would be the case under a pure form of communism), but the results are pretty much the same either way. A tiny elite at the top gets almost all of the economic rewards.
There are some out there that would suggest that the answer to our problems is to move more in the direction of “socialism”, but to be honest that wouldn’t be the solution to anything. It would just change how the table scraps that the rest of us are getting are distributed.
If we truly wanted a return to prosperity, we need to dramatically shift the rules of the game so that they are tilted back in favor of individuals and small businesses. A much more pure form of capitalism would mean more wealth, less poverty and a more equitable distribution of the economic rewards in this country.
But it will never happen. Most of our politicians are married to the big corporations and the wealthy elitists that fund their campaigns. And most Americans are so uneducated that they believe that what we actually have today is “capitalism” and that the only alternative is to go “to the left” toward socialism.
Very few people out there are suggesting that we need to greatly reduce the power of the federal government and greatly reduce the power of the big corporations, but that is exactly what we need to do. We need to give individuals and small businesses room to breathe once again.
With each passing year, things get even worse. In fact, the founder of Subway Restaurants recently said that the environment for small businesses is so toxic in America today that he never would have been able to start Subway if he had to do it today.
What I want to do now is to discuss some of the results that “corporatism” is producing in America.
First of all, we continue to see incomes go down even though we live in an inflationary economy.
As Time Magazine recently reported, personal incomes took a huge nosedive during the month of January…
Data released by the Commerce Department last week showed that personal income fell 3.6% in January, the biggest decline in 20 years. The drop was even bigger when taxes and inflation are taken into account. Real personal disposable income fell by 4%, the biggest monthly drop in half a century.
Real median US household income — that’s “real,” as in “adjusted for inflation” — was $50,054 in 2011, the most recent data available from the US Census Bureau. That’s 8% lower than the 2007 peak of $54,489.
Meanwhile, big corporations are absolutely raking in the cash. The following is from a recent New York Times article…
“So far in this recovery, corporations have captured an unusually high share of the income gains,” said Ethan Harris, co-head of global economics at Bank of America Merrill Lynch. “The U.S. corporate sector is in a lot better health than the overall economy. And until we get a full recovery in the labor market, this will persist.”
The result has been a golden age for corporate profits, especially among multinational giants that are also benefiting from faster growth in emerging economies like China and India.
Today, corporate profits as a percentage of U.S. GDP are at an all-time high, but wages as a percentage of U.S. GDP are near an all-time low.
Just check out the following chart. Corporate profits have absolutely exploded over the past decade…
Meanwhile, wages as a percentage of GDP continue to fall rapidly…
Most of the jobs being created in America today are “low wage” jobs. Tens of millions of Americans are working as hard as they can only to find that they can barely put food on the table and provide a roof over the heads of their children. The ranks of the “working poor” are exploding and the middle class continues to shrink.
Many of you that are reading this article are members of the working poor. You know what it is like to stare up at your ceiling at night wondering how you are going to pay the bills next month.
Crystal Dupont knows what it’s like to try to live on the federal minimum wage.
Dupont has no health insurance, so she hasn’t seen a doctor in two years. She’s behind on her car payments and has taken out pawn shop and payday loans to cover other monthly expenses. She eats beans and oatmeal when her food budget gets low.
When she got her tax refund recently, she used the money to get ahead on her light bill.
“I try to live within my means, but sometimes you just can’t,” said Dupont, 25. The Houston resident works 30 to 40 hours a week taking customer service calls, earning between $7.25 and $8 an hour. That came to about $15,000 last year.
It’s a wage she’s lived on for a while now, but just barely.
Sadly, the number of Americans that are “just barely” surviving continues to grow.
But if corporate profits are soaring to unprecedented heights, then who is getting all of those rewards?
The monopoly men of the global elite are.
Just check out the following video which does a great job of illustrating how corporatism has systematically funneled all of the economic rewards in our system to the very top…
Once again, I want to make it very clear that I am not advocating socialism as the answer in any way, shape or form. Socialism takes away the incentive to create wealth and it almost always results in almost all of the economic rewards going to a very tiny elite anyway.
As I said earlier, what we need is a return to a much more pure form of capitalism, but this is so foreign to the way that most people think that most people will not be able to grasp this.
It certainly would be possible to greatly reduce the power of the federal government and greatly reduce the power of the big corporations at the same time, but this is so “outside the box” for most people that they cannot even conceive of doing such a thing.
We need to create an environment where individuals and small businesses can thrive once again. But instead, most of us are content to continue “playing the game” and getting enslaved in even more debt.
For example, according to CNBC, auto loans just continue to get larger and continue to get stretched out for longer periods of time…
American car buyers, attracted by new models and cheap financing, are taking out bigger auto loans and stretching out the terms of those loans to a new record length.
New analysis from Experian Automotive shows the average new car loan in the fourth quarter of last year was $26,691 and stretched out over an average of 65 months. The length of the average loan is one month longer than the previous record set in the third quarter of last year.
What will they think of next?
Will we eventually have auto loans that get paid off over 10 years?
By the way, that is another way that the monopoly men of the global elite get all of our money. They enslave us to debt, and we spend year after year of our lives slaving away to make them even wealthier.
They are very smart. There is a reason why they have 32 TRILLION dollars stashed away in offshore tax havens. They know how to play the game, and they are very happy that most of the rest of us are asleep.
Fortunately, it appears that an increasing number of Americans are waking up.
In the past year, I’ve been slowly but surely waking up to the nonsense happening around me. There’s so many things I need to simply get off my chest, so excuse the length of this post. Recently in the past two years, I’ve gotten married and have been medically discharged from the Marines after being injured in Afghanistan. Being 23 years old and married, my goal is secure a secure a future for my family, but with the way things are going, I’m not exactly sure how much of a future we’re going to have in 50 years. I can’t explain it, but I’ve felt this need to change my attitude and motivations lately.
I started by turning off the garbage music, television and other mindless entertainment that seems to plague my generation. It was easier than it looked – I don’t miss most of it really. The next order of business was to educate myself on world news, so that’s what I did. Every day, like clockwork, I check all major mainstream news feeds (NBC, Fox, Abc, CNN, Reuters, BBC, etc.) as well as not-so-mainstream news sites – yours being one of them. It’s incredible how fast our world changes and the manner in which it changes. The local 10 o’clock doesn’t show anything but local news, sports, weather, lottery #’s and whatever else they decide to throw in. It’s a night and day difference once you start to actually research and see what’s happening all over the world. Look at the number of comments about a news story on the economy and then look at a celebrity story on the “news”….People are so blind, it truly amazes me. My friends, family and classmates at college seem to be under a spell of some sort. They’re distracted – and it’s contagious. Nobody I know gives a damn about global affairs/economics. They’re more interested in the newest iPhone, cars, shows, movies, and just about anything else you can think of. I’m not saying there’s anything wrong with these things, but my friends/family/peers are CONSUMED by these distractions. When the election was taking place in 2012, every Tom, Dick and Harry on Facebook had an opinion and rant. After the circus ended however, everyone simply went back to posting about parties, kittens, Farmville etc. It’s a huge joke. For me, it’s little terrifying and exciting to see history unfolding in front of our eyes. This country of ours is going through big changes now that will most certainly affect our future, so I strive to adapt and prepare myself and my family. I’m looking at buying my first home this summer. Right now I live in an apartment right outside Philly and spend more money on rent than most pay for a mortgage. I need a house with a little land to raise chickens, grow fruits/vegetables, store canned food – and to be as independent from the system as I can. For my job, I wanted a skill/trade that people would always need, so I picked the funeral business. On the side, I work in construction and have been learning everything there is to know about building with my own two hands. I feel as though these old forgotten skills are going to be handy in a short while.
Hopefully we can get a lot more people to wake up and start breaking out of “the matrix” of control that is all around us.
Right now, the system is designed to continually funnel more money and more power to the very top of the pyramid. The global elite are becoming more dominant with each passing day. Unless something dramatic happens, at some point the American people will become so powerless that they won’t be able to do anything about it even if they wanted to.
The idea of a very tiny elite completely dominating all the rest of us goes against everything that America is supposed to stand for. In the end, it will result in absolute tyranny if it is not stopped.