dinochick

The Humpty Dumpty Economy

Excellent article.

It bothered me when they brought the bailout proposal on three sheets of paper, then it expanded to over 50.

The prosperity that we were living in was false, created by credit. The inflation of housing prices is what caused many to use their "easy credit", and of course the "disposable goods". When a toaster broke, you tried to fix it. Now you throw away and spend another $20 on one.
However, this "tude" has gone on for a long time. While allot of goods are cheaper than they used to be, some don't work as well. And, of course by the time you buy a laptop, it is outdated.

The old underwriting formula was 29/33 ratios. (yep I am an underwriter) and we didn't even include women's income of child bearing age (yes there was that "prejudice" in the seventies). So obviously, there is a serious "gap" that needs to be closed. Increase salaries or lower housing prices..

When companies lower salaries (as many are doing now due to the extensive unemployed who are desperate for anything) they contribute to the problem. Until standardized salaries for specific work, and limitations on housing inflations are regulated, you will continue to have this mess. I know this affects free enterprise, but obviously we didn't handle it very well.