LilBob

Time for the U.S. Economy to Reindustrialize

You are spot on in stating that the US needs to reindustrialize. The out-sourcing of production in this country was basically a gravy train that brought about the opportunity to sell to developed world consumers without having to pay developed world wage rates. Unfortunately, once the wealth that had accumulated over the years in the bank accounts of the WWII generation was largely spent, the method resorted to for continued economic growth was to pretend that credit was a creator of economic demand-rather than a vehicle of existing and pending economic demand-and to leverage away. The end result is an economy that is not sustainable in the long term because those "higher paying and more productive jobs" that were promised via various media outlets when out-sourcing began turned out to be imaginary and you can't continue to increase consumer spending when growing numbers of Americans are being transitioned out of "Old Economy" union jobs that payed living wages into service and retail sector jobs that rarely pay more than ten dollars an hour.

Debunking the 'Too Big to Fail' Myth Once and for All

I'm a firm believer that antitrust legislation hasn't been used aggressively enough in a number of fields. When you have too few firms you get oligopoly, simple as that; profits rise but quality of service declines. Those wonderful "economies of scale" that are ballyhooed by the pro-mergers and acquisitions crowd are great for facilitating multi-million dollar executive salaries but they also cost a significant number of jobs at the local level. If you look at things from the perspective of payroll and property taxes, development of significant economies of scale by massive corporate entities actually cost municipalities and the federal government millions of dollars a year.

Banking is just one of the industries that should fall under the knife of anti-trust legislation, health insurance companies should be next.

U.S. Credit Card Defaults Soar to Record High

This is what the credit card companies get for courting less-creditworthy customers in their own version of the sub-prime crisis. For the last several years credit card companies have been eagerly pursuing customers with less than perfect credit histories so they could maximize profits from exploded interest rates and late payment fees associated with the use of these cards. It's another example of people getting too greedy and adopting half-assed business plans. I've been using one of those regional banks that's still doing fairly well for years and it wasn't until I'd been with that bank for several years and made some efforts to improve my credit score that I was finally offered a credit-card. I still have the same interest rate that I did when my card was first given to me, and every time the card has expired the new one I was issued had an increased credit limit from the previous card because I've always paid on time. The banks that stuck with old-fashioned conservative banking practices are sitting pretty after years of being nay-sayed by the bankster media for being (insert circa 2005-2007 Cramer-esque insult for conservative regional banks here).

Housing's Big Picture Isn't Pretty

Sorry about the typos...I get too excited with my ramblings sometimes.

Housing's Big Picture Isn't Pretty

Carlos, you are correct in saying that Education and Healthcare are at least nominally included in CPI calculations. A better wording for my statement may have be that Education and Healthcare costs are not "effectively" reflected in CPI figures. (I don't get into my whole "non-profit profiteers" spiel about increasing costs for professional services and credentials and my belief that heads of non-profits should be subject to the same Presidential Salary Cap as heads of banks receiving bailout funds-I'll save that for another day.) Largely because if we did accurately reflect the increase in costs for health-insurance premiums, physical exams and college tuition, the growth in costs for these professional services would yield inflation figures of around 7.5% or higher per annum.

Housing's Big Picture Isn't Pretty

One thing I find interesting is that if you look at the writings of some early 20th century economists such as Pigou and Hobson, conditions that required urban workers to spend more than 20% of their disposable income on housing were considered significant contributors to poverty. Nowadays, someone who only spends 20% of their salary on housing is considered to be doing relatively well.

What we are seeing now in housing prices is the inevitable result of globalization, which will-in the long run-average out the living standards between different countries for everyone but the wealthiest 1/2% of the world's population. (You didn't really think that you could have millions of Americans lose those good-paying union jobs and shuffled into 8 and 9 dollar an hour service sector employment without it eventually affecting property values did you?) As it turns out, those "more productive and higher paying jobs," that displaced workers were supposedly going to find didn't actually exist. Also, the structure of our economy is such that anytime an area becomes so affluent that working class people can no longer afford to live there, restaurants and stores start closing because they can't find workers, goods and services are no longer available, you get empty store-fronts and urban blight of commercial spaces (because even rich kids vandalize property) and everything starts going downhill. This is the end result of all those egotistical morons who thought they could kill the unions, push credit, hype real-estate and just keep growing wealthier and wealthier with no limit and no ill effects.

As regards the CPI, costs for health-care and education (two relatively important factors when one lives in the developed world) have been omitted from those figures for years and the CPI is really pretty much meaningless.

BofA's State of Denial

Don't forget the obvious here, bank administrators are dieing to pay back these funds so they can get themselves out from under the 500K salary cap. (Turns out those "other industries" they could turn to for jobs as justification for those enormous salaries don't actually exist in any quantity.) Ergo we're going to see a lot of seemingly irrational behaviors as bank managers do everything they can to stuff money back into governmental coffers and return to their multi-million dollar salaries. It has nothing to do with safety, economics or logic; it's about individual greed.