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Edited on Fri Oct-10-08 06:49 AM by HereSince1628
in a populist attempt to blame those greedy rich bastards.
I am not blaming consumers, I'm saying too many consumers have empty pockets and many of those those with two nickles to rub together fear getting empty pockets. That lack of purchasing is killing the economy. The largest consumer population in the world has been taken off-line. And that one, will kill the economy of the entire world. Sticking it to American workers who are the world's greatest consumers is coming home to roost.
The games the mortgage companies and hedge funds played worked just fine until there were no longer consumers to buy the surplus housing. The game of revolving consumer credit worked fine until folks started losing their jobs in droves.
No one cared as prices on things became stratospheric, everyone just paid the price and moved on.
30 years ago no one would have imagined starting the day by driving out in a $27,000 station wagon sitting on a truck frame to get a $4 cup of coffee, or making a call that's part of a $40 a month basic phone bill, or watching Joe Scarborough as part of a $100 per month television service. Or buying access to radio signals from space.
The GREEDY BASTARDS ran the prices up on everthing. And consumers willingly went into debt to have all those things, actually adding interest costs to the already high cost of the goods they bought.
It all went on nicely for over a couple decades and suddenly consumers decided not to pay anymore. We saw destruction of demand for the $27000 vehicle happen in just several months. And why did consumers quit spending on these behemoths? How about doubling of gasoline prices combined with nine straight months of job losses? How about consumers finally reallizing that for a decade entire factories were being packed up and sent to southern China and now their precious jobs were at risk? How about the fear of poverty coming back into the psyche of the middle class?
The folks who lived through the Great Depression taught about the Depression as a period when there was not enough money to buy goods, resulting in companies slowing or halting production, causing more job losses and LESS money chasing the goods on the shelf. We are in for that sort of bad cycle.
It won't be broken until INCOMES start to get replaced and consumers have money to buy things. All the "rescue billions" to banks aren't going to stop what is going on. Consumer JOBS and consumer confidence need to be re-established. Until they are, it's gonna look a lot like the 1930's.
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