That's the preception from the gondola of the the bubble economy, a place where there never are any real consequences for crimes, corruption, and incompetence.
That bubble is about to burst.
(Hat tip to OmahaSteve for the following)
http://blog.aflcio.org/2007/03/02/a-week-of-ugly-economic-newsA Week of Ugly Economic Newsby Tula Connell, Mar 2, 2007
What to make of the nation’s economy after a week of mostly unpleasant indicators? The Dow plummeting more than 400 points on Tuesday may be a “correction” or may be something bigger.
Of greater portent for the near future—and of more significance to most working families—are several other stats that came out this week Let’s take a look.
* New home sales drop 16 percent in January. At the same time, home owners with subprime mortgages are getting hit with new monthly mortgages they can’t afford. Some 20 percent of subprime loans at the biggest U.S. mortgage lender, Countrywide Financial, are more than 60 days late and late payments are increasing in the non-subprime mortgage markets.
* Working people’s personal savings are nearly nonexistent. Two-thirds of workers have less than $50,000 saved—with 39 percent having less than $10,000 set aside for retirement, according to new numbers released from the Employee Benefit Research Institute (EBRI). Yet, recent EBRI research shows individuals age 55 who live to age 90 would need to have accumulated $210,000 (by age 65) to pay for insurance to supplement Medicare and out-of-pocket medical expenses in retirement—far more than all but about 10 percent of workers currently have saved for all retirement expenses.
* Worse, consumers spend more than they earn. American workers spent more than they earned last year as the economy steamed ahead, pushing the personal savings rate to negative 1.0 percent, the deepest hole since the 1930s Depression, according to the U.S. Commerce Department. Meaning not only did Americans spend all their income, they dug into savings and used credit to buy more.
* More and more info tech jobs are being exported overseas. We noted earlier this week that a new report from the Brookings Institution finds 2.4 million jobs in some 250 U.S. cities will be sent overseas between 2004 and 2015.
* U.S. trade deficit is in the tank. The United States ran a record trade deficit in 2006 for the fifth consecutive year, according to the U.S. Census Bureau . The bureau said that the trade deficit, or gap between what the United States sells abroad and what it imports, reached $763.3 billion last year, a 6.5 percent increase over the year before. To deflect focus on this massive deficit, the Bush administration has been touting a recent increase in U.S. exports. But while the nation’s exports have boosted profits for U.S. companies, “they have not meant more jobs for American factory workers,” according to a recent New York Times article.
* Central banks are diversifying away from the dollar. A record trade deficit, increased foreign holdings of U.S. debt, an out-of-control federal budget and a negative savings rate make the dollar an unattractive currency. Here’s how Bonddad puts it on The Agonist:
The short version is simple: The U.S. is borrowing today hoping the growth rate will be fast enough to help us pay down the debt. However, there is nothing extraordinary about the current U.S. growth rate compared to other expansions. Our current growth rate is on par with the growth rate of the last 25 years. In short, we are borrowing to achieve the same growth rate we have always had during an expansion.
So the Bush administration is taking the nation deep into debt just to achieve the modest growth we’ve made in the past without hocking our children’s future.
Given these recent reports, it’s no surprise that today, a Reuters/University of Michigan report shows U.S. consumer confidence fell last month from a two-year high, declining to 91.3 in February, a five-month low, from 96.9 in January.
While the Wall Street crowd fixates on the stock market, the economic indicators that make or break the financial threads working people sew together every day also need addressing—and fast. Because here’s what’s not working: Bush’s failed trade deals, lack of attention to creating fiscal policies that encourage U.S. corporations to keep jobs in this country and vitriolic opposition to strengthening America’s middle class by such measures as leveling the playing field for workers to form unions.
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