The Deflation of the American Dream

Key Points

1. Americans sense that something is deeply wrong, even if they can't articulate it. What they sense is that corporate profits have decoupled from wages, and they don't like it one bit.
2. Not only are wages stagnant, but inflation is headed higher due to soaring budget deficits and loose monetary policy.
3. Inflation will be especially bad in global commodities: As America stalls, emerging markets will displace this country as the engine of demand for oil, metals, and other global commodities. In addition, as deficits weaken the U.S. dollar, international commodities will become even more expensive.
4. Anxiety is spreading as Americans realize they face an ongoing decline in living standards. This anxiety explains why the healthcare debate has degenerated into an embarrassing, partisan fiasco.

Profits Soar, Wages Stagnate

Despite a deep recession, corporate profits are on the rebound. Cost-cutting dominated earnings reports in the second quarter, and cuts allowed companies to post positive earnings surprises despite lousy sales. Trimming the workforce remains a sure-fire way to boost earnings, especially in a recession. So even though wage growth is sluggish and unemployment is near 10%, corporate earnings are on the mend.

The disconnect between corporations and workers will only grow, since outsourcing is putting relentless pressure on anyone whose skills can be put through a fiber-optic cable. Being a plumber never looked so good…

"What's Good for GM..."

Not only can corporations rapidly realign costs, but multinationals can also allocate capital overseas. They invest wherever returns are highest. So even after firms "right-size" their American workforce to post-recession demand, there is no guarantee that job creation will return. It's simply not true that "What's good for GM is good for the country." When a multinational firm can create jobs anywhere in the world, they look for the most productive labor per dollar. Unfortunately, American labor is burdened with high costs for health care, and our manufacturing plants are burdened with high costs for the environment. The playing field is not level. Thus, we cannot expect job creation to rebound once this recession is over. (As for the GM quote, GM President Chalie Wilson was quoted out of context, and was not being arrogant.)

Income Stagnation and Income Concentration

Incomes may be stagnating for the working class, but not for the rich, so income inequality is on the rise. The Gini Index has documented this for decades, and the trend shows no signs of letting up. Despite the rise of the super-rich, the impact of outsourcing tends to be deflationary: As corporations continue to cut costs and outsource work, we have a "race to the bottom" for wages. This sums up the present-day experience of many corporate workers in America: Low job security, continual pressure to boost productivity, and the ongoing threat of outsourcing.

Wage stagnation has long been a problem for people without a college education, and now it affects people of every education level. The middle class and upper middle class now feel the squeeze that the working class has felt since the 1970s. Plumbing, anyone?

Wage pressures weren't always so relentless. Back in 1914, Henry Ford doubled wages to $5 a day, which reduced turnover and boosted productivity at Ford Motor (F). Unfortunately, this kind of thinking would be heresy for a CEO today. Modern compensation rewards the people at the top for cutting the wages at the bottom, and outsourcing is the weapon of choice.

The Problem Crosses Party Lines

If income inequality angers liberals, then tax inequality angers conservatives. The concentration of wealth in the hands of the few has another unhealthy side-effect: The U.S. relies very heavily on income taxes from the super-rich. The top 1% of U.S. taxpayers pay 40% of all income taxes, and the top 5% pay more taxes than the remaining 95%. By relying on the super-rich, tax revenues have become as volatile as the stock market, leading to even bigger budget deficits during this recession.

So as corporate profits become disconnected from wages, it isn't just workers who suffer. Tax revenues have become skewed, and sluggish disposable income hurts overall consumer demand. These are headwinds for the entire U.S. economy.

Commodity Inflation

Overseas, the economic picture is brighter, since outsourcing continues to benefit workers in the emerging markets. In fact, rapid growth in emerging markets is one reason why the long-term outlook for commodities is so bright. As Dr. Leeb has noted, emerging markets are displacing the U.S. as the engine of global commodity prices. For example, global oil demand will not be hurt by the stagnation of wages in America; instead, we Americans will have to adjust our living standards downward.

Here is a simplistic explanation: The average American worker commutes to work for 30 minutes alone in a car. This worker is competing for a gallon of gasoline with six workers from India who take a cab together, and who travel just ten minutes to work. Long, lonely commutes are a U.S. phenomenon that is being challenged by third-world workers who take buses and public transport to urban centers.

This is just one example of how the average U.S. lifestyle will be impacted by outsourcing. "Leveling of the playing field" may give us cheaper products at Wal-Mart (WMT). But it also produces job insecurity, and a sustained rise in demand for global, fungible commodities (such as oil, plastics, chemicals, metals, etc.).

Bottom line: Wage deflation will continue unless outsourcing is capped, unions re-emerge, or American workers suddenly become more productive.

Falling Wages Won't Stop Inflation...

America is pulling out all stops to reflate its debt-laden economy. Unfortunately, loose monetary and fiscal policy will fuel inflation and long-term erosion in the U.S. dollar. That's why I include non-dollar bonds and a currency short in my inflation basket.

...But Fed Purchases Will Delay It

I also am looking at shorting the long bond, once Fed support dissipates. For now, quantitative easing by the Fed is supporting treasury auctions, as Zero Hedge has repeatedly pointed out. Fed support has made a sham of Treasury auctions, and this has fooled the media. This is one reason why our spiraling deficits haven't already caused a panic. It should: Warren Buffett has called the Treasury market a bubble, and Jim Grant calls Treasuries "return- free risk."

The Deflation of the American Dream

Fortunately, the economy didn't slip into the abyss back in March. But American anxiety is climbing due to rising unemployment, job insecurity, erosion in real wages, collapsing home prices, mushrooming budget deficits, etc. What's more, Americans are slowly realizing that things are not going to return to the good old days of low unemployment, rising home prices, rising stock prices, and early retirement with full benefits. It's gone.

As anxiety spreads, so does cynicism about Wall Street, the U.S. government, and the U.S. dollar. So people are buying gold. Folks who were one euphoric about President Obama now distrust him, his policies, and his proposals. Health reform? Forget it. Gone are the days when people can politely debate the issues. People are desperate to hold on to what little they have, so they attack opponents with vicious, partisan stereotypes and polarizing ideological cliches.

Healthcare Reform: The Irony Is Thick

Back in July I speculated about whether health care reform would be hurt by the Gates controversy. People were growing angry and restless, and it seemed strange that the arrest of a Harvard scholar would trigger such a strong reaction from people across the political spectrum.

I now believe that the root cause of our national neurosis is neither war, nor deficits, nor recession--it is the deflation of the American Dream. People are anxious about the future, and they are desperate to hold on to whatever they have.

This has had an ironic impact on heathcare reform. People are rejecting reform because of anxiety, even though health care costs are a leading cause of outsourcing. Without reform, it is likely that the disconnect between corporations and the American worker will continue to grow. As will our anxiety.

My hope is that Republicans and Democrats will put aside their partisan bickering, and help the American worker to become healthier and more competitive. A reform package that does this, in the context of a balanced budget, would go a long way to restoring the American Dream.

Disclosure: No positions

Comments

[Davewmart:]

Rob, I would disagree that class hatred doesn't get you anywhere.
In France the memory of 1789 is still alive, witness the bossknappings etc.
The French ruling class knows very clearly the limits to the extent they can push the people, and it is fear which provides this check.
In the US in the 30's a real fear of revolution led to some of the worse excesses being curbed, and the introduction of the laws splitting banking.
It is both right and proper that there should be hatred for those who have shamelessly gamed the system, and extracted money in the hundreds of millions individually for wrecking the system.
The problem is that many Americans have swallowed the bs that it is the fault of the people who have been thrown out of work by outsourcing, whilst wrongly crediting those who have made money by criminal and near criminal activities in the financial markets with entrepreneurial initiative.
Until there is a turning away from this sort of worship of those who are actively conspiring together to enrich themselves at the expense of the many, together with a determination to bring them to book, no progress can be made.
We want these characters to be turning themselves in to the prosecuting authorities in the hope that it may save them from lynching.
Revulsion and hatred are in my view entirely appropriate emotional responses to the activities of many of the connected elite.

Aug 31 05:23 AM

[Robert Mart...:]

Dave,

I'll grant you this: When capitalism becomes exploitation, moral leaders need to "speak truth to power." That is social justice.

But I can't hate the person, since my Christian beliefs demand that I "hate the sin and love the sinner." As a minister, I need to be especially mindful of my comments. www.calvarybc.org/min.htm

With that caveat, I agree with your analysis of the realpolitik; a backlash WOULD curb exploitation. Some people only exercise restraint when their hand is forced. Mike Bethune once told me "We need to do more than just 'speak truth to power'. The people in power KNOW the truth, and that's why they're in power." (Mike is a good friend of mine, and an insightful brother.)
michaelbethune.com/fai.../

I DO believe that financial crimes should mean jail time. This almost never happens, even though it would be the best deterrent. Madoff went to jail because of the moral outrage. A lesser thief might have walked. Unfortunately, jail is used to warehouse the poor more often than it's used to punish fraud in high places. I commented at length about this last week seekingalpha.com/artic...

I like your comments about the French Revolution, and how the fear of revolt still restrains French politicians today. The spirit of the French Revolution would go a long way to reforming the state of capitalism in the U.S.

On second thought, I hesitate to even call America capitalist anymore. We certainly aren't practicing laissez-faire capitalism. Recent government bailouts show that America is increasingly run for the benefit of large corporations, and for multinational giants. Corporate interests respect no political borders--they just follow the money.

Enough ranting and rambling from me.
Thanks for your comments,
Rob

Aug 31 11:02 AM

[Davewmart:]

Rob,
'But I can't hate the person, since my Christian beliefs demand that I "hate the sin and love the sinner." As a minister, I need to be especially mindful of my comments. '

You don't have to hate the person to deal justice to them, and refuse to accept shoddy excuses.
In many traditional Christian societies, those who were deemed to have gone outside of it's precepts were forced to sit in the 'Mercy' seat. where they were held up for public excoriation.

For someone like yourself, perhaps the best model for dealing with this is the fight against the slave trade, which was abolished when it was enormously remunerative.

In 'polite' society in the UK it simply became unacceptable to support it.
After all, after having a certain amount of money and comfort, what is gained by accumulating more?
The respect of your peers, and if this is denied , what is the use?
Modern society instead tends to praise the most sociopathic, rather as the Romans did when the Republic declined.

As for:
'Madoff went to jail because of the moral outrage. A lesser thief might have walked. '

you surely know better than this!
Take the punishment per pound stolen, if you go into a Bank with a gun you will likely serve many years in harsh prisons for perhaps $100k.
After much negotiation whilst he dwelt in a luxury in his penthouse, Madoff will go to a minimum security prison, whilst the many who profited and if they didn't know that criminal activity was afoot should have done, will get off scot-free.

He is small beer though, as the ones who control the system and have ruthlessly gamed it, and turned the whole of the financial system into a giant ponzi scheme, are off with their hundreds of millions made through being 'connected' without so much as a slap on the wrist.

I am thinking of such actors as Paulson, who was aware enough that his actions might otherwise be classed as criminal to demand immunity before utilising hundreds of billions of assets in an entirely unaccountable manner to bail out his buddies.

I ain't a Christian, but judgement and punishment are surely part of the Christian tradition.
They might get their souls forgiven, but their bodies were often in very deep doodoo.

I would suggest that all that is needed to deal with financial malfeasance is using the laws applicable to drug dealers.
All assets for the actors and their families should be confiscated, and sentences under Rico laws for conspiracy should be applied.

They can apply their brains to undo the complications of derivatives from the comfort and privacy of a prison cell, assuming that they prefer to do that for a dollar a day rather than sew mail bags.

Aug 31 03:21 PM

[Robert Mart...:]

Dave,

Thanks. You said at the end:

"I would suggest that all that is needed to deal with financial malfeasance is using the laws applicable to drug dealers.
All assets for the actors and their families should be confiscated, and sentences under Rico laws for conspiracy should be applied."

I believe that Rico laws and asset seizures DO apply to financial criminals.

"They can apply their brains to undo the complications of derivatives from the comfort and privacy of a prison cell, assuming that they prefer to do that for a dollar a day rather than sew mail bags."

LOL! (Insert image of Madoff as a seamstress HERE)

Rob


On Aug 31 03:21 PM Davewmart wrote:

> Rob,
> 'But I can't hate the person, since my Christian beliefs demand that
> I "hate the sin and love the sinner." As a minister, I need to be
> especially mindful of my comments. '
>
> You don't have to hate the person to deal justice to them, and refuse
> to accept shoddy excuses.
> In many traditional Christian societies, those who were deemed to
> have gone outside of it's precepts were forced to sit in the 'Mercy'
> seat. where they were held up for public excoriation.
>
> For someone like yourself, perhaps the best model for dealing with
> this is the fight against the slave trade, which was abolished when
> it was enormously remunerative.
>
> In 'polite' society in the UK it simply became unacceptable to support
> it.
> After all, after having a certain amount of money and comfort, what
> is gained by accumulating more?
> The respect of your peers, and if this is denied , what is the use?
>
> Modern society instead tends to praise the most sociopathic, rather
> as the Romans did when the Republic declined.
>
> As for:
> 'Madoff went to jail because of the moral outrage. A lesser thief
> might have walked. '
>
> you surely know better than this!
> Take the punishment per pound stolen, if you go into a Bank with
> a gun you will likely serve many years in harsh prisons for perhaps
> $100k.
> After much negotiation whilst he dwelt in a luxury in his penthouse,
> Madoff will go to a minimum security prison, whilst the many who
> profited and if they didn't know that criminal activity was afoot
> should have done, will get off scot-free.
>
> He is small beer though, as the ones who control the system and have
> ruthlessly gamed it, and turned the whole of the financial system
> into a giant ponzi scheme, are off with their hundreds of millions
> made through being 'connected' without so much as a slap on the wrist.
>
>
> I am thinking of such actors as Paulson, who was aware enough that
> his actions might otherwise be classed as criminal to demand immunity
> before utilising hundreds of billions of assets in an entirely unaccountable
> manner to bail out his buddies.
>
> I ain't a Christian, but judgement and punishment are surely part
> of the Christian tradition.
> They might get their souls forgiven, but their bodies were often
> in very deep doodoo.
>
> I would suggest that all that is needed to deal with financial malfeasance
> is using the laws applicable to drug dealers.
> All assets for the actors and their families should be confiscated,
> and sentences under Rico laws for conspiracy should be applied.<br/>
>
> They can apply their brains to undo the complications of derivatives
> from the comfort and privacy of a prison cell, assuming that they
> prefer to do that for a dollar a day rather than sew mail bags.

Sep 02 04:17 PM

[David in D:]

Robert, excellent article.

Sep 03 07:04 PM

[punk_ash:]

There will never be job creation in US unless health care is fixed for good. What is wring with health care is that there are too many leaches sucking on it. Seniors expect to be taken care of with a very expensive medicare, which is fair, but there are hundreds on thousands of lawyers living off of health care, doctors and nurses and dentists and pharmacists making insane amounts of money. Where will all this money come from? Things will only get worse when no one is willing to fund out deficits and much worse when the dollar falls (if it does) and even more worse when these baby boomers start retiring.

Sep 03 11:11 PM

[Robert Mart...:]

David,
Thanks--I put a lot of time into it. These form my core assumptions about the economy and capital markets.
Rob
______________________...

Punk_Ash:

I think that health care will become THE issue for this country, and it will eventually affect corporate outsourcing. As people realize that corporations can just outsource to avoid paying healthcare costs, the political backlash will grow worse.
Rob

Sep 04 10:58 AM

[Student of ...:]

Keep in mind that outsourced jobs aren't going to England, Germany, France or Canada where they have socialized medicine. These countries have higher taxes than the US and they can't compete against cheap labor from India or China either...

I read a lot about enviornmental sustainablilty, which I suppose is nice. Why is it that nobody is willing to face the issues associated with economic sustainability as it relates government spending? Socialism as we know it is still relatively new. I'm guessing 1945 to present in Europe and Canada? Their current government spending and deficits (along with the US) are not sustainable. How long will it take until they collapse under the weight of their entitlement programs and deficit spending? Think socialized medicine will save money? National healthcare programs in England and France are in the red by billions. Think their healthcare is better? Survival rates for almost all cancers are siginificantly higher in the US. Without a doubt, we definitely need reform. Personaly, I'd go after the insurance companies, especially the ones that have non profit status and sit on billions of dollars (yes billions) in reserves. I'd also go after the drug companies that refuse to make any honest to god concessions while offshoring all of their research and development and manufacturing. They think they do their R & D for nothing in China and India? There going to be in for a big surprise when their current technology is stolen and they do not produce any innovation...


On Sep 03 11:11 PM punk_ash wrote:

> There will never be job creation in US unless health care is fixed
> for good. What is wring with health care is that there are too many
> leaches sucking on it. Seniors expect to be taken care of with a
> very expensive medicare, which is fair, but there are hundreds on
> thousands of lawyers living off of health care, doctors and nurses
> and dentists and pharmacists making insane amounts of money. Where
> will all this money come from? Things will only get worse when no
> one is willing to fund out deficits and much worse when the dollar
> falls (if it does) and even more worse when these baby boomers start
> retiring.

Sep 06 12:17 AM

[Robert Mart...:]

Student of History:

China and India get a free ride from pharmaceutical innovation in the United States. This is a huge invisible tax on the American economy. As you noted, they are in for a big surprise when their innovations are stolen.

As for the economies of Western Europe, they have made choices that favor equality over practicality. This is a more egalitarian form of democracy, and its varieties range from lightly-regulated capitalism to unadulterated socialism.

For example, Ireland and Denmark are relatively "free" economies, according to the Heritage Foundation's "Index of Economic Freedom". www.heritage.org/Index...
I believe this methodology captures the essence of free-market capitalism. (Laissez-faire capitalism is nearly impossible to find, since some regulations are necessary to prevent exploitation and deception.)

Will the socialist economies collapse? Perhaps if U.S. folds up its military umbrella and lets Europe fend for itself. Until then, Western Europe will continue to benefit from our role as global cop.
Rob

Sep 06 08:02 PM

[Michael Clark:]

Robert: Well-written, well-considered. I'm following you now.

"As anxiety spreads, so does cynicism about Wall Street, the U.S. government, and the U.S. dollar. So people are buying gold. Folks who were one euphoric about President Obama now distrust him, his policies, and his proposals. Health reform? Forget it. Gone are the days when people can politely debate the issues. People are desperate to hold on to what little they have, so they attack opponents with vicious, partisan stereotypes and polarizing ideological cliches."

That's a very dark picture, and one that I think is very accurate. The Day of the Lord is coming. The Lord has given; and the Lord is also taking away.

Sep 25 02:30 PM

[Robert Mart...:]

Michael,

Thanks.

I didn't mean to sound so gloomy. : ) I ended the article on an upbeat note, hoping for a truce in the war over healthcare reform.

You noted that "The Lord giveth, and the Lord taketh away." This is from the book of Job, chapter 1, verse 21: "The Lord gave, and the Lord hath taken away; blessed be the name of the Lord." Job said this after he lost his children and his wealth as Satan tested his faithfulness. Indeed, America's lament today sounds a lot like Job, now that the bubble has burst.
_________________

As I reread my article, I realized that I left off an obvious result of American anxiety: PROTECTIONISM. Fortunately, Ed Harris makes this point quite well in today's article: "The Protectionist Bogeyman" seekingalpha.com/artic... Ed describes how protectionism threatens "Chimerica", a problem that occurs since countries act solely in their own interest: "Politics is always domestic." So, even though protectionism hurts global trade, each country acts solely for its own citizens. (See also "Tragedy of the Commons" en.wikipedia.org/wiki/... and "Mutually Assured Destruction".)en.wikipedia.org/wiki/...
__________________

In any case, as job losses in the U.S. lead to protectionist tendencies, China will be affected most. Michael Pettis wrote this today: seekingalpha.com/artic...

Michael describes how China's policies have contributed greatly to its trade surplus (via low wages, low interest rates, and a depressed currency). China desires a trade surplus for domestic reasons, just as the U.S. desires protectionism for domestic reasons (to preserve jobs and wages). Bottom line: I think that America and China are on a collision course over trade, which will be partially resolved by erosion in the U.S. dollar.
___________________

More grim news!

Sorry about that, but I have to call it as I see it. They don't call economics the Dismal Science for nothing. For an encouraging word, I prefer Scripture. Case in point: The book of Job ends with a complete reversal of fortune.
: )

Be well,
Rob

Sep 25 06:18 PM

[Michael Clark:]

Robert: I think the Book of Job is an excellent reference to what we are entering.

Job loses everything -- but never loses himself.

I think the idea of the Lord giving/teh Lord taking away fits in very well with the idea of the Law of God including a cycle of expansion (expansion of wealth, opportunity, happiness) inevitably followed by a contraction of these things. A time of filling up, a time of emptying out. I think I've pinpointed these cycles as 18 years of expansion followed by 18 years of contraction. 'Contraction' having at least a double-meaning: death/birth linked together.

Next expansion to begin 2019.


On Sep 25 06:18 PM Robert Martorana wrote:

>
> Michael,
>
> Thanks.
>
> I didn't mean to sound so gloomy. : ) I ended the article on an
> upbeat note, hoping for a truce in the war over healthcare reform.
>
>
> You noted that "The Lord giveth, and the Lord taketh away." This
> is from the book of Job, chapter 1, verse 21: "The Lord gave, and
> the Lord hath taken away; blessed be the name of the Lord." Job
> said this after he lost his children and his wealth as Satan tested
> his faithfulness. Indeed, America's lament today sounds a lot like
> Job, now that the bubble has burst.
> _________________
>
> As I reread my article, I realized that I left off an obvious result
> of American anxiety: PROTECTIONISM. Fortunately, Ed Harris makes
> this point quite well in today's article: "The Protectionist Bogeyman"
> seekingalpha.com/artic...
> Ed describes how protectionism threatens "Chimerica", a problem that
> occurs since countries act solely in their own interest: "Politics
> is always domestic." So, even though protectionism hurts global
> trade, each country acts solely for its own citizens. (See also "Tragedy
> of the Commons" en.wikipedia.org/wiki/...
> and "Mutually Assured Destruction".)en.wikipedia.org/wiki/...
>
> __________________
>
> In any case, as job losses in the U.S. lead to protectionist tendencies,
> China will be affected most. Michael Pettis wrote this today: seekingalpha.com/artic...
>
>
> Michael describes how China's policies have contributed greatly to
> its trade surplus (via low wages, low interest rates, and a depressed
> currency). China desires a trade surplus for domestic reasons, just
> as the U.S. desires protectionism for domestic reasons (to preserve
> jobs and wages). Bottom line: I think that America and China are
> on a collision course over trade, which will be partially resolved
> by erosion in the U.S. dollar.
> ___________________
>
> More grim news!
>
> Sorry about that, but I have to call it as I see it. They don't
> call economics the Dismal Science for nothing. For an encouraging
> word, I prefer Scripture. Case in point: The book of Job ends with
> a complete reversal of fortune.
> : )
>
> Be well,
> Rob

Sep 26 06:32 AM

[Michael Clark:]

One last note, Robert. The Book of Job says "Blessed be the Name of the Lord." It doesn't say 'Blessed be the Lord."

The 'Name" of the Lord in composed of four Jewish words:
Jod - the Father
He - the Mother
Vau - the Son
He (the Second) - the Daughter

This is a clue to the construction of the world in FOUR SEASONS, which is a reference to the "Lord gives (Light) and the Lord takes away (the Light)." Spring -- the Golden Age -- a time of planting; Summer - growth; Autumn - harvesting; Winter - Sabbath, rest.

Sep 26 06:37 AM

[Michael Clark:]

As for wealthy folks buying homes, people with cash ALWAYS have options. I heard that rich folks in South America actually profited from hyper-inflation, since they could adjust their portfolios accordingly.

Robert: Hyper-inflation is how the rich confiscate more property from the poor. It's the act of war by the rich against the poor.

Sep 26 06:40 AM

[Michael Clark:]

Part of the problem the 'socialist' states are suffering is the same problem we are suffering. We've been inflating the prices of everything BUT wages since 1983. We need times of both INFLATION and DEFLATION. Expansion of debt/credit/prices followed by deflation of the same. But the rich are terrified of deflation because it will lower the value of ALL the assets they own -- and this is what gives them power. They would rather see the entire nation enslaved and crushed by inflation than to lose one ounce of their power.

Inflation is how the rich oppress the poor.


On Sep 06 12:17 AM Student of History wrote:

> Keep in mind that outsourced jobs aren't going to England, Germany,
> France or Canada where they have socialized medicine. These countries
> have higher taxes than the US and they can't compete against cheap
> labor from India or China either...
>
> I read a lot about enviornmental sustainablilty, which I suppose
> is nice. Why is it that nobody is willing to face the issues associated
> with economic sustainability as it relates government spending?
> Socialism as we know it is still relatively new. I'm guessing 1945
> to present in Europe and Canada? Their current government spending
> and deficits (along with the US) are not sustainable. How long will
> it take until they collapse under the weight of their entitlement
> programs and deficit spending? Think socialized medicine will save
> money? National healthcare programs in England and France are in
> the red by billions. Think their healthcare is better? Survival
> rates for almost all cancers are siginificantly higher in the US.
> Without a doubt, we definitely need reform. Personaly, I'd go after
> the insurance companies, especially the ones that have non profit
> status and sit on billions of dollars (yes billions) in reserves.
> I'd also go after the drug companies that refuse to make any honest
> to god concessions while offshoring all of their research and development
> and manufacturing. They think they do their R &amp; D for nothing
> in China and India? There going to be in for a big surprise when
> their current technology is stolen and they do not produce any innovation...
>

Sep 26 06:45 AM

[Michael Clark:]

I agree, Punk. The problem with universal health-care is NOT the concept, it is the execution. Also, its the inflationary bubble that the medical cartel has erected, which still has not burst. Burst the bubble (deflate it), and halth-care again becomes affordable.

If the Founding Fathers would have foreseen the mess we have today in health-care they would have included health-care as a right of all citizens. In the 1770's health-care was probably free, or very inexpensive. It used to be doctors' were revered because they devoted their life to serving humanity. Now they are honored because they are rich and famous, serving the rich and famous. The idea that no one will study to be a doctor if they can't get rich doing it is lame. But we need to burst the higher ed bubble also. People studying to become doctors should NOT be forced to go into heavy debt in school.

We have a lot of things to fix. Greed is NOT the best motivator if you want a society that is not greedy.


On Sep 03 11:11 PM punk_ash wrote:

> There will never be job creation in US unless health care is fixed
> for good. What is wring with health care is that there are too many
> leaches sucking on it. Seniors expect to be taken care of with a
> very expensive medicare, which is fair, but there are hundreds on
> thousands of lawyers living off of health care, doctors and nurses
> and dentists and pharmacists making insane amounts of money. Where
> will all this money come from? Things will only get worse when no
> one is willing to fund out deficits and much worse when the dollar
> falls (if it does) and even more worse when these baby boomers start
> retiring.

Sep 26 06:54 AM

[Robert Mart...:]

Michael,

Thanks.

You noted that I misquoted Job. seekingalpha.com/artic... Please note that I did include "name". As for alternate Hebrew meanings, I couldn't follow your derivation with the Hebrew tools at my disposal www.biblestudytools.co...

In your comment to PunkAsh seekingalpha.com/artic... you talk about the "higher education bubble".

Interesting--this shoe has yet to drop, but this bubble will surely pop.

Rob

Rob

Sep 26 10:59 AM

[Michael Clark:]

Rob: I wasn't noting your misquote -- I was just emphasizing (to myself and others) how important the idea of the 'Name' was in this passage. Enjoy reading your comments.
MJC


On Sep 26 10:59 AM Robert Martorana wrote:

>
> Michael,
>
> Thanks.
>
> You noted that I misquoted Job. seekingalpha.com/artic...
> Please note that I did include "name". As for alternate Hebrew meanings,
> I couldn't follow your derivation with the Hebrew tools at my disposal
> www.biblestudytools.co...;version=kjv
>
>
> In your comment to PunkAsh seekingalpha.com/artic...
> you talk about the "higher education bubble".
>
> Interesting--this shoe has yet to drop, but this bubble will surely
> pop.
>
> Rob
>
> Rob

Sep 26 11:08 AM

[Al-USA:]

Interesting article Mr. Martorana and good comments by the readers.

Regarding the "Deflation of the American Dream", I recall my review of 2008 census data where in 1967-1968 an average household made about $45k/year while in 2008 it was still only $55/year, both adjusted for inflation. That represents about +22% to +30% (doing this from memory so excuse the imprecise numbers) increase in inflation adjusted wages for a period spanning 2 generations but of course, inflation more eroded all of that wage increase, and then some.

I don't have the figures for inflation from 1967 to 2008, but from 1980 to 2008 inflation has increased +175%! Clearly, the deflation has been decades in the making and is well on its way to collapsing into a "black hole": a reference to a dying super massive star which deflates, collapses on itself, and creates a black hole.

Sep 26 03:41 PM

[Robert Mart...:]

Michael:

Thanks for clarifying!

I pulled out a bunch of translations, thinking I had missed something. In any case, the parallels between the book of Job and today's credit cycle could keep me busy for days.

_______________________

Al-USA:

The data you highlighted are an alarming indication of income stagnation for the middle class.

The data become even MORE alarming when we consider the census data are usually for HOUSEHOLD income. The working class and middle class have become increasingly dependent on two wage-earners, since it is increasingly difficult to support a family on one income. So I ask: Is it progress when household income rises only because both partners are now working?

This trend is consistent with the many people I know who are sweating it out just to make ends meet. Meanwhile, the view is quite different from the top income earners, and these folks dominate the media, Wall Street, and Washington. For top income earners, two incomes represents a CHOICE, not a necessity, and the issues discussed revolve around child care and personal fulfillment. Meanwhile, the working class continues to grind it out for an income that is stagnant after adjusting for inflation (and less after health-care costs are considered). This is one more reason why so many Americans fear their generation will see downward mobility, also known as "The Deflation of the American Dream."

I'll have to devote my next article to something positive. Maybe I'll write "Rebuilding the American Dream."

: )
Rob

Sep 28 03:11 PM