Recession – Who Cares?

The soothsayers have slaughtered the ox and are examining the gloppy entrails for signs: Rising unemployment, a falling dollar, weak consumer spending, the credit crisis, a swooning stock market. Could there be something wrong here? Could we actually be approaching a, god forbid, recession?

To which the only sane response is: Who cares? According to a CNN poll, 57 percent of Americans thought we were already in a recession a month ago. Economists may complain that this is only because the public is ignorant of the technical – or at least the newspapers’ standard – definition of a recession, which specifies that there must be at least two consecutive quarters of negative growth in the GDP. But most of the public employs the more colloquial definition of a recession, which is hard times. If hard times have already fallen on a majority of Americans, then “recession” doesn’t seem to be a very useful term any more.

The economists’ odd fixation on growth as a measure of economic well-being puts them in a parallel universe of their own. WorldMoneyWatch’s website tells us that, for example, that “The GDP growth rate is the most important indicator of economic health. If GDP is growing, so will business, jobs and personal income.” And the latest issue of US News and World Report advises, “The key… for America is to keep its economy growing as fast as possible without triggering inflation.”

But hellooo, we’ve had brisk growth for the last few years, as the president always likes to remind us, only without those promised increases in personal income, at least not for the middle class. Growth, some of the economists are conceding in perplexity, has been “de-coupled” from mass prosperity.

Growth is not the only economic indicator that has let us down recently. In the last five years, America’s briskly rising productivity has been the envy of much of the world. But at the same time, real wages have actually declined. It’s not supposed to be this way, of course. Economists have long believed that some sort of occult process would intervene and adjust wages upward as people worked harder and more efficiently.

And what about the unemployment rate? The old liberal faith was that “full employment” would create a workers’ paradise, with higher wages and enhanced bargaining power for the little guy and gal. But we’ve had nearly full employment, or at least an unemployment rate of under five percent, for years now, again, without the predicted gains. What the old liberals weren’t counting on was a depressed minimum wage, impotent unions, and a witch’s brew of management strategies to hold wages and salaries down.

Now if those great and solemn economic indicators – growth, productivity and employment rates – have become de-coupled from most people’s lived experience, then there’s something wrong with the economists, the economy, or both. The clue lies in the word “most.” We have become so unequal as a nation that we increasingly occupy two different economies – one for the rich and one for everyone else -- and the latter has been in a recession, if not a depression, for a long, long time. Not all economists can bring themselves to admit this.

I suspect that America’s fabulous growth in productivity is another illustration of the disconnect between economic measures and human experience. It’s been attributed to better education and technological advances, which would be nice to believe in. But a revealing 2001 study by McKinsey also credited America’s productivity growth to “managerial innovations” and cited Wal-Mart as a model performer, meaning that we are also looking at fiendish schemes to extract more work for less pay. Yes, you can generate more output per apparent hour of work by falsifying time records, speeding up assembly lines, doubling workloads, and cutting back on breaks. Productivity may look good from the top, but at the middle and the bottom it can feel a lot like pain.

When employees are squeezed hard enough, then you have the possibility of a genuine recession as technically defined. People buy less, so growth declines, to the point where even the economic over-class has to sit up and take notice. This is happening in Japan, where a recent Wall Street Journal headline announces: “Growing Reliance on Temps Holds Back Japan’s Rebound: Firms Increasingly Add Part-Time Workers; Spending Power Lags.” The U.S., where consumer spending accounts for 70 percent of the economy compared to a little more than half in Japan, is even more vulnerable to a downturn in personal consumption.

What is this fixation on growth anyway? As a general rule of biological survival, any creature or entity that depends on perpetual growth is well worth avoiding, lest you be eaten alive. As Bill McKibben argues in his book Deep Economy, the “cult of growth” has led to global warming, ghastly levels of pollution, and diminishing resources. Tumors grow, at least until they kill their hosts; economies ought to be sustainable.

Apocalypse aside, the mantra of growth has deceived us for far too long. What it translates into is: Don’t worry about the relative size of your slice, just concentrate on growing the pie! Now, with a recession threatening even more suffering for those who are already struggling, may be the perfect time to get out the pie-cutter again. Too bad that the one leading Democratic candidate who promises to do so now appears to be on the ropes.

Comments

[blue8064]

There is a particular measure that I believe is needed to help the poor, but that does not seem to be on any politician's agenda as far as I can tell. Although it probably will not solve all problems, it would be a good place to start. It certainly ought to have higher priority than further tax cuts for the rich such as repealing the estate tax. If we are indeed in a recession, this measure would be even more important now.

Specifically, the DEPENDENCY EXEMPTION needs to be converted from a tax deduction into a 100%-REFUNDABLE TAX CREDIT, and the CHILD TAX CREDIT needs to be made 100%-REFUNDABLE. Indeed, all tax breaks for children and dependents need to be made 100% refundable tax credits. The standard deduction might also be converted into a 100%-refundable tax credit. This should be done at both federal and state levels.

That way, even those who earn too little income to owe any income tax would still get the full benefits of these tax breaks. Since these middle class tax breaks already exist, the only cost would be the incremental cost of extending them to the lowest incomes. Such merely incremental costs ought to be affordable. There should also be less risk of unintended consequences, since we already have some idea how these tax-breaks function in real life.

Unlike conventional means-tested welfare, child and dependent refundable tax credits would help the working poor, as well as those not working. Additional earned income would not mean a dollar for dollar reduction in benefits. The refundable tax credits would offset the Social Security tax, as well as the income tax. This is extremely important to the working poor, since most low-income workers owe more Social Security tax than income tax.

More generally, the size of child and dependent refundable tax credits would depend exclusively on the number of children and dependents one has a right to claim. One's income and/or assets would be completely irrelevant, as would one's marital status. Therefore, unlike conventional means-tested welfare, although they would be available to those not working, they would not punish work, savings, or marriage.

In other words, the incentives for both the poor and the middle class would be very much the same. Since there would be no means-testing, extending existing middle-class tax breaks to the poor ought to avoid the most perverse incentives of means-tested welfare, which tends to punish work, savings, and/or marriage. This is the main advantage to this approach for a safety net for the poor.

Child and dependent refundable tax credits could be an alternative or a supplement to raising the minimum wage. Unlike a higher minimum wage, employers would not bear the entire cost. Therefore, there should not be the problem of employers refusing to hire the so-called "low-skilled" people, which is the main reason given for opposing a higher minimum wage.

Yet low wage employees would still get more take home pay, which is the main purpose of a higher minimum wage. Since there are limits to raising the minimum wage, given the risk of employers refusing to hire the so-called "low-skilled" workers, supplementing low-wages with negative income taxes will clearly still be necessary, even with a higher minimum wage.

I should mention that low-wage jobs are not necessarily as unskilled as we often seem to think. Specifically, I have noticed that we often seem to forget that dealing with customers is a skill. Even many low-wage jobs involve dealing with customers. When one considers that some customers will be nasty, and that dissatisfied customers may stop doing business with the company, and possibly spread the word to others, it seems to me to be awfully risky to take for granted the skill of dealing with customers.

Moreover, skill deficiencies here cannot always easily be remedied by more education and training. Most standard education and job training do practically nothing about deficiencies in social intelligence. This is especially a problem for high-functioning autistics. They are often intelligent enough to get advanced degrees, but lack the social intelligence to do most jobs requiring those advanced degrees. Even worse, since their chief skill deficiencies are things that most people seem to learn without being taught, they are often completely unaware of what they do not know.

Although the Earned Income Tax Credit provides some benefits as far as it goes, it is ABSOLUTELY NOT a substitute for my proposal to convert the dependency exemption from a tax deduction into a 100%-refundable tax credit, and make the child tax credit 100%-refundable. The Earned Income Tax Credit is available only to those who are working; it provides NOTHING AT ALL to those who are not working.

However, my proposal to convert the dependency exemption from a tax deduction into a 100%-refundable tax credit, and make the child tax credit 100%-refundable would provide some minimal income even to those who are not working. This difference is critical. In today's harsh job market, fundamental human rights require that some minimal income be available even to those who are not working. This is even more true if the economy is indeed in a recession.

To counter tendencies to blame the victim, it is time to insist that, just as accused criminals are innocent until proven guilty in the eyes of the civil law, poor people ought to be presumed to be deserving, until proven otherwise. In addition, even poor people who can be proven to be at fault still ought to have any rights that a convicted criminal would have. This is especially true of rights that even convicted cold-blooded murderers have. However, even during recessions, the unemployed are still presumed to be personally at fault without any proof of guilt. That ought to be totally unacceptable, and ought to be challenged in court.

I find it impossible to see how welfare for the poor could be an unaffordable tax burden as long as we are providing for convicted murderers at taxpayer expense, no questions asked. Specifically, if convicted murderers are provided food and shelter at taxpayer expense in their jail cells, how can one object to providing taxpayer support to others in need? This includes illegal immigrants as well. Surely, cold-blooded murder is a much greater evil than laziness or immigrating illegally.

Similarly, as long as there are questions about the appropriateness of executing convicted murderers, I find it impossible to see how it could be just to have capital punishment for laziness or illegal immigration, especially if guilt has not been proven. Deliberately setting limits on access to food or other basic necessities of life is the practical equivalent of capital punishment. Even if capital punishment is appropriate for cold-blooded murder, it would still seem to be unjust to have it for laziness or illegal immigration.

Therefore, time limits on eligibility for both welfare and unemployment compensation ought to be challenged in court on the grounds that they violate the principle of innocent until proven guilty, and the penalties (capital punishment by starvation or lack of some other basic necessity) are totally disproportionate to any wrong done. This means that the deliberate cutoff of welfare or unemployment compensation to those who need them ought to be considered cruel and unusual punishment and therefore unconstitutional.

Speaking of illegal immigration, we need to question the moral justice of our immigration laws. Offhand, it would seem that any man-made law that attempts to deny basic human rights to any human being for any reason would be contrary to God's commandments. In that case, attempting to enforce such a law would be morally evil; it would have also been morally evil to pass such a law in the first place. As far as respect for the rule of law is concerned, God's commandments ALWAYS come first.

A genuine lack of sufficient resources to provide for the poor or illegal immigrants would, by definition, necessarily mean insufficient resources to provide for convicted murderers as well. This is not only a question of fairness. If jailed criminals have more right to the basic necessities of life than the poor, there is an incentive for those in need to deliberately commit crimes specifically in order to ACTIVELY FORCE the taxpayers to pay the costs of supporting them in jail. The tax dollars that we spend on jail sentences for criminals prove that we as a nation CAN AFFORD to provide welfare to those who need it.

This means that in order to really abolish the welfare state, it will be absolutely necessary to have capital punishment for practically all crimes, not just the most serious crimes. There is simply no other way that those who deliberately commit crimes in order to actively force the taxpayers to pay the costs of supporting them in jail, as described above, can be stopped. Indeed, this is probably why most crimes seem to have had capital punishment for most of human history before the 20th century more often than not. In those days, society simply could not afford the costs of jailing someone for a long time, especially since doing so would encourage more people to commit crimes.

[Colin]

Greetings,

After having lived in Chicago for the past few years, I feel that I am ready to express how I feel about "dividing up the pie." I would like to give the poor, ignorant masses exactly nothing. That is right, "0". I wake up at 6 in the morning and go to work, and I will damned if I will give one penny to help those ignorant, lazy bastards. Go visit a public school in the city. I work there. The students listen to I-Pods and tell all their teachers to "f--- off." I don't have any sympathy anymore. They have a faulty culture, and they are low I.Q. They don't believe in hard work, or education, and they don't deserve health insurance, better schools, or anything. They deserve to wallow in their own lousy neighborhoods that they have created/destroyed. If we lived in less enlightened times, I would gather them up to go break rocks for a few years and learn a work ethic. Barbara and the rest of the enlightened should spend a little time living among those poor huddled masses. Maybe then they would figure out that most people are getting just what they deserve. Most people in the ghetto and on welfare are either a) lazy or b) studpid with no value of education. Now we are bringing in the ignorant masses from the south and we have created a huge underclass. I like living in gated communities, and I don't want my kids living among those who don't value education. I want to shelter them from unhealthy cultures. It is not about race; it is about work ethic, and family culture. Why should we split the pie? They will just buy drugs, etc. Look at the cases where they have built brand new highschools. The ghetto kids just do the same nonsense in a nicer building. Giving money to the poor is not the answer. How do you change someone's morals or values, you can't. The underclass will just continue to grow. Poor people aren't just good, intelligent people with no opportunity. They are uneducated (proud of it), usually violent and may be criminal. People writing in from Canada simply don't understand how deep it goes. I would be more than happy to take them on a tour of the beautiful, cultural city of Detroit anytime. Detroit is the epitome of a modern diverse city. Go visit and then write me back about the value of cultural diversity. Also, visit during the night. That is when the true charm of the city comes out. Just like Paris after dinner..ha ha. Communism failed, and no one wants to share. Are we all created equal? This is survival of the fittest. This is how human beings have lived for thousands of years. Life is not fair, and no, human beings are not kind animals. Grow up all of you, and face reality. Some will succeed and most will fail. It has always been like this throughout history. If you are smart and crafty, you will succeed. If you are lazy and stupid, you will grow old waiting for the government to give you handouts. I thank you for your time.

Colin

[barbsright]

Colin, you do have a point. There are people who can do well given the right options, but lets face it there are a lot of crooks out there too. Barbara speaks to hard working people, like me and my friends, who have very limited options despite solid educational and employment histories. The people who you deal with may be termed incorrigible. Perhaps it is time for you to get a new job.

[oldbogus]

We've not had “full employment”; the underemployment level has been between 8% and 9% for most of the W years. The gummint falsified the records as they also did the inflation rate to make things look rosy.

Growth of some kind is required to keep capitalism afloat. The entire system of capitalist propping up of "investors" is a Ponzi scheme just like the "bubbles" which we've seen. Eventually there must be an adjustment; the longer the adjustment is delayed, the more drastic it becomes.

[diane nilan]

I should have been an economist instead of a homelessness activist. I predicted the economic demise, specifically the foreclosure mess, years ago when I worked with families who became homeless thanks to predatory lenders.

What's going on in millions of homes across the country will equal or surpass the destruction of Katrina, though more subtle than the slimy floodwaters. By the time it happens those in charge will find out that our safety net wasn't really there in the first place and we will have a rise in homelessness far greater than even I can imagine. Who would want to be president of this country???!

[Sheila]

I agree with diane nilan. Whenever I see the nation's low unemployment levels cited, my jaw drops. Anybody who's been out here slogging knows that MOST people who lose their jobs don't register at the Unemployment Office anymore. That's because, for one convoluted reason or another, they don't QUALIFY for unemployment benefits. Most of America's jobless aren't even in the records.

[Tim Worstall]

"Economists have long believed that some sort of occult process would intervene and adjust wages upward as people worked harder and more efficiently."

Not an occult process, no. Economists tend to call the process "a market". As productivity rises a company can make higher profits by employing more workers. Thus they go and hire more. Other companies do the samething and thus wages rise as companies are competing with each other for that extra labour and those higher profits.
There's nothing occult about this, it's simply how the labour market works and it's well explained in the basic economic literature and textbooks.

The one fly in the ointment is that this relationship breaks down when productivity is growing faster than GDP itself. Companies find that the increase in productivity allows them to increase their production without having to hire new labour. Thus there's no competition for labour and no wage rises.
This is what has been happening over the past few years: productivity rising faster than GDP. However, here's the good news. Rises in productivity have slowed, to less than GDP rates, and so wages are on an uptick. As, indeed, over the past year or so they have been.
To repeat, there's nothing occult about this, it's a well known feature of the labour market.

[Osipov]

Colin, for your sake, I hope your world never crumbles . . . yours or your children's . . . There but for the grace of God go I.

[Anarcissie]

Barbara: '... What is this fixation on growth anyway? ....'

Because the present system allocates benefits in a highly unequal manner, more according to luck and power than anything else, something must be done to assuage or deflect the natural resentment and envy of those who get the smaller shares of the well-known pie. Otherwise, slacking, sabotage, or even rebellion may result.

Among the solutions are those which provide versions of "You'll get pie in the sky bye and bye." The religious version is known as "You'll get pie in the sky when you die," but there is also the secular version, usually called "Growth", which promises that those who submit and work hard will get something in the future sometime.

Apparently this sort of thing works, because instead of forming unions and cooperatives and otherwise taking care of their own business, the workers mostly keep worshiping and electing great leaders and keep believing in the mighty institutions they lead and, of course, keep on being disappointed and cheated by them.

Maybe humans are just wired that way, and it's tough luck. In any case, no president or other great leader is going to change it. We have to do it ourselves, or it's not going to happen.

[cookie]

Barbara - I first discovered your books when I picked up Nickeled and Dimed, a good read from a human interest perspective. I found your blog and forums about a year or so ago and have been following in “lurker mode.” However, I feel that I have to comment on your latest blog “Recession – Who Cares?”

You said

“According to a CNN poll, 57 percent of Americans thought we were already in a recession a month ago. Economists may complain that this is only because the public is ignorant of the technical – or at least the newspapers’ standard – definition of a recession, which specifies that there must be at least two consecutive quarters of negative growth in the GDP. But most of the public employs the more colloquial definition of a recession, which is hard times. If hard times have already fallen on a majority of Americans, then “recession” doesn’t seem to be a very useful term any more.”

As one of your commenters “Oldbogus” remarked, the government has been falsifying the figures for some time. This is widely known by most economists and also by many investment bankers. This has only belatedly come to John Q. Public’s dawning notice as the figures grow ever more patently ridiculous. There is a large industry that has developed that delivers more accurate data for commercial and academic use. However, some of that information is available to the general public. If anyone is interested in reading about this in more depth, I recommend www.shadowstats.com. This site requires a paid subscription to access real-time data and statistics, but there are a lot of explanatory articles posted on there for free.

Yes, we are in a recession – both in a technical sense and as people (accurately) perceive it. The Administration is actively channeling Groucho Marx “Who are you gonna believe? Me or your own lying eyes?” Although officially-released government figures still show a positive up tick in the GDP, actual data has been negative since the fourth quarter of 2004. For example, the officially-reported GDP is 2.84% for the third quarter of 2007, but using data calculated using pre-1983 government methodology shows that the fourth quarter GDP was at minus 2.35%. Inflation officially reported at under 4% is actually around 12%. The Bureau of Labor Statistics employment figures are widely derided as absurdist fantasy. They are not based on actual job count but rather on hypothetical job growth. In December, the BLS reported a net gain (adjusted) of 18,000 jobs. All independent indicators showed the volume of help wanted advertising plunging and unemployment benefit application surging. The BLS also is required to report on the Household Survey – which goes out and actually counts the households with jobs. Let me quote directly from their official website:

The number of unemployed persons increased by 474,000 to 7.7 million in
December and the unemployment rate rose by 0.3 percentage point to 5.0 percent. A year earlier, the number of unemployed persons was 6.8 million, and the jobless rate was 4.4 percent.

Has anyone been reading the news lately about the staggering layoffs from the troubled financial industry? Fear not!! The official government figures report a net gain of 17,000 jobs in the financial industry in December.

I guess this posting makes me appear some kind of anal statistics and financial geek. Until six months ago, I never ever paid attention to financial news. It bored me beyond silly. I stuck 10% of my income in a 401K and a few hundred dollars now and then in a 2.5% savings account and just forgot about it, as I had for years. My job makes me move around a lot. I throw a lot of my old receipts into boxes and forget about it. However, my job regularly takes me overseas. And I have noticed how prices doubled or more in dollar terms in the past year or two, once I looked over my old receipts before throwing them out. How did this happen? I started to read up on this sort of thing. I turned off the reality shows and Home Shopping Network, quit reading National Enquirer and started paying attention to MSNBC and Bloomberg. What I have seen scares me.

I am just a working shmuck. I don’t have millions in the stock market. I am not a day trader but I am now a regular reader of the financial news sites because I think of them as straws in the wind. They say a vicious hurricane is brewing and the breeze has just started to freshen. The present recession is going to deepen sharply, we will soon see the advent of hyperinflation as the government tries to dig out from under $50 trillion worth of debt and a steeper depression than the 1930’s may be on the table.

Regards

[Larry In Lethbridge]

I think Americans need to adjust the level of consumerism down a bit and stop being so bloody greedy.

Looks good on you that your currency is in peso status and is being driven further down the tubes. Ha Ha

Serves you all right for electing such a wise prez like Shrub Bush twice !!!!

And you thought everyone looked up to Americans ?

[TLFoster]

When the quality of jobs for the middle class are drastically lowered to the point that having a degree can eliminate you from the potential job pool, when corporate America is so concerned about the bottom line that it continues to out source as many jobs as possible, and as the government continues to deny the existence of a problem because corporate profits, in the short-term, continue to rise, then how can the American public sustain its spending on goods and services? The answer is, "It can't!" Wake up folks! Corporate American, in particular the over-paid executives, are sacrificing the long-term good of the nation in order to get their fat separation packages and to Hell with the rest of the workforce.

[Colin]

Also, why have sympathy for people who are so stupid that they elected Bush twice? They elected a man who cut the taxes for the rich, and left the poor to suffer. Most Europeans think that Americans are morons, and probably 90% of them are. The poor are so ignorant they don't know how to vote. No matter who wins the Democratic ticket, the rednecks out in the wastelands (anywhere outside of major city) will vote for the Republicans. You just watch. It makes me sick. What kind of democracy do we have when 90% are functionally illiterate. There are maybe, and I mean maybe 10% that know what is going on, and most of them are too busy working, with no vacations. There is no hope. I am sorry about this. It is unfortunate, but America was always just about making more money, which is a primitive goal at best. We were doomed to fail basing a whole society on money. Sad, sad, sad. Many of us should move to Europe or Australia, or even Canada. It should be another 20 years until they follow us down the toilet. Diversity of culture is a nightmare. Jungles are diverse and dangerous. Where are the safest areas in America? Where are the areas with the best educated people? They aren't the most culturally diverse areas, I can tell you that. This is the fall of Rome. We are adrift, and things are only going to get worse in the future.....
Colin

[Angelia Sparrow]

The only thing I agree with Colin on is that it is Rome all over again.

Feckless leaders. Circuses (not even bread) for the masses. Disasterous foreign wars, which bring back new diseases (talk to some vets of Gulf I. Mom-the-Nurse has told me horror stories of her Guard friends)and invaders right to our doorstep.

The middle class is being increasingly squeezed by slave labor (immigrants and oursourcing) to the point where those I know who can are leaving.

All we're missing is a military coup and feudalism.

But I suspect those will be answered by Blackwater and the returning soldiers from Iraq (camps are in place and clergy are being trained to help get people into them) and corporate serfdom.

[J. X. Rodríguez]

colin: '... Where are the safest areas in America? Where are the areas with the best educated people? They aren't the most culturally diverse areas, I can tell you that. ...'

You are wrong about that. New York City is highly diverse, has a very high immigrant population, and has a low crime rate. Check the figures out for yourself -- they're public record.

[Tom]

The rich are deceiving themselves if they think they are going to escape this economic downturn "unscathed."
They have more to lose, so they will lose more. If it gets really bad, as some predict, all those big homes and so-called gated communities will become targets for the homeless masses of marauders that will roam like a large gang, preying upon any sign of wealth, to survive. These homeless gangs will be far larger than the police or the army (which are all made up of and actually come from of the working stiff class, so you can guess whose side they'll largely become when the revolution happens). We're in for bleak times folks, no matter who is elected (since they're all really working for corporate America, not us any more). Thanks go out to the Republicans and Democrats that fell in line with the Bush "plan." It looks like we're in for some real chaos in the coming year.

[roger]

colin:

"No matter who wins the Democratic ticket, the rednecks out in the wastelands (anywhere outside of major city) will vote for the Republicans."

" What kind of democracy do we have when 90% are functionally illiterate."

rednecks = illiterate republicans = knuckle dragging homophobes. it looks like you need to get out a little more. if we had 90% illiteracy in the wastelands, jefferson city and eugene and compton and bethelehem and branson and omaha would cease to function. its a good thing we rednecks have the literate, urban, sophisticated, erudite likes of you to salvage our sorry butts. otherwise we might make all manner of ill advised choices without your kind and wise advise. the murder rate in chicago. how is that working out for you.

[roger]

" But a revealing 2001 study by McKinsey also credited America’s productivity growth to “managerial innovations” and cited Wal-Mart as a model performer, meaning that we are also looking at fiendish schemes to extract more work for less pay. "

yes yes more fiendish schemes. and you get to revile walmart as a bonus. innovations might also include increased security for the prevention of employee and customer theft, decreased shipping and materials costs, on site employee counseling for employee drug addiction and mental illness, improved product selection. of course none of these considerations are nearly as salacious as walmart working old women seven or eight of nine hours without a smoke break and then docking their pay when they collapse. your acrimony toward business is astonishing.

[roger]

see this is what im saying. its a good thing we rednecks have you pedagogues to guide us along. this from the wasteland of tyler, texas:

http://www.tylerpaper.com/apps/pbcs.dll/article?AID=2008801110310

" When asked how eating a hamburger compared to cannibalism, Friedrich said all meat is from a corpse. "

[Barbara E]

Goldman Sachs says we are probably already in a recession: http://money.cnn.com/2008/01/09/news/economy/recession/?postversion=2008010918

[Anarcissie]

We could be well into a combination of recession and inflation. As cookie pointed out (thanks for the link, by the way!) the Federal government has found it advantageous to cook important figures like the CPI. If, instead of using dollars, you plot various dollar-denominated indexes like the Dow or S&P 500 against an important internationally traded commodity, like gold, silver, copper, platinum, crude oil, natural gas and so forth, you get a downward trajectory -- one that would be rather exciting in an airplane. Given that we are now in an election year, Bernanke is almost certain to try to avoid a crash by dropping interest rates, which is likely to intensify inflation and yet may not have much effect on the equities markets and real estate because of the large component of fiction in their evaluation. It is hard to tell because it is hard to get reliable information. Generally, when things are out of balance, putting off the correction makes the correction all the worse when it finally arrives.

People have made fun of the gold bugs for many years, but the gold bugs may have the last laugh.

[Kay Dennison]

Bottom line: The rich are getting richer and the middle class is shrinking. It's time to throw out the bums who have sold their souls to the corporations.

[Anarcissie]

But then what bums are you going to replace them with?

[Brian]

Everything on the Recession article is rightly correct so I wanted to focus on another aspect "accountabilility".
Absolutely no-one has even been charged of anything in the subprime debacle, the gross malfeasance and fraud involved in that kind of mortgage underwriting, the clever packaging scheme of raising junk mortgages totally lacking in any due diligence to the triple AAA bond status of U.S. Treasury bonds, the shipping off-shore to European and Asian banks of part of the risk based on these ratings, as well as to ambitious money market and pension funds thinking they could benifit with the big boys. The entire thing was a multi-layered fraud scheme as clear as broad sunlight in a cloudless sky, yet the SEC, the fed, the treasury, the Bush administration have done virtually nothing to fix accountability on the schemers who put this together. Further, they were paid huge multi-million dollar bonuses, some tens of millions, a few hundreds of millions, as they were figuratively "sacked" from the big banks and brokerages suddenly losing money on all the funny paper. Once again, corporate board rooms were immune and not held accountable by anybody. Only now is New York State and a Cleveland starting to utilize their legal and regulatory obligations in the manner. No-one is even talking about how this has sharply depressed the stock market right when working people were starting to put their retirement money back into the stock market in their 401k's and IRA's, and this in an age of eliminated pensions from their employers and a limited time to grow the money necessary to a semi-dignified retirement. So you had people fraudulantly and irresponsibly fill out mortgage applications to originators who winked and looke the other way to grow their businesses and bonuses. Then you had the bond rating agencies wink at the brokerages and banks who had them value this "paper" as perfect AAA with no more risk than a U.S. Treasury as they were paid by the banks and brokerages, who then sold it on the open market as great profitably low to riskless stuff so they could get more money to leverage the carry trade borrowing from the Japanese at 1% and then rolling that cheap money into US Treasuries paying 4.5%. Then to further their profits they "invented" whole new legions of leverage and risk management paper, swaps, default loans, cross holdings,etc etc from which they also acquired additional issuing and management fees. So they created fraudulant worthless financial instruments to levarage a Treasury and whole new industry of yet even more creative instruments till the cockroaches started coming out of the woodwork. When the first stories broke of a breakdown in the scheme they denied it, then said it was only a little thing, then suddenly started writing down first small, then large losses and said that was it. Then suddenly they admitted to even larger losses, systemic losses, possible bankruptcy just weeks after promising they would never go bankrupt. They sacked a few CEO's, started the long process of coming clean and cleaning up their balance sheets by posting losses, and still it goes on. One brokerage fired the CEO only to make him still a top manager with an 8 figure salary. This is what has been going on at the top while people on the lower end worry about a recession. If there is a recession, it won't affect the big banks and brokerages that much as they have already written puts and hedges against one and stand to even make money with these bets. And you can bet they will give huge bonuses once more to their top earners and all their managers, so for them very little has changed except a few have lost face or jumped to the next fast moving ship. There is just no Accountability. Yet let a poor man steal a carton of milk from an all night store and he will surely be handcuffed and hauled off to jail. A democracy doesn't do this to its people.

[wafranklin]

This government LIES, and many in this blog comments do not care. Unemployment statistics are lies, every syllable spoken or written are lies.

Unemployment, now perhaps nominally 5%, leaves out the ones who gave up looking (say 3-4 million), the war machine (3-4 million) and incarcerated (perhaps 2 million). That would make unemployment now as much as 15-18% of work age citizens. The CPI leaves out all the stuff which is skyrocketing, like gasoline.

I am tired of being the least bit nice to you folks who brought us this lying, scheming, corrupt, criminal regime which aims to do no less than absolutely demolish our civil rights. No you worry about crap like abortion and distracters fed to you by the right wing press controlled by the corporations which also put in Bush. We have really been a recession for a while. And why are folks more desperate for help, well dummies, it is because the average wage has not increased in 30 years, in fact decreased, while the cost of living continued to climb.

It is time for outright class warfare, in the street, constant and unrelenting. They will throw the police and troops are us, showing just what they have been preparing for. Which side are you on as the old union song goes.

[Buena]

There's no doubt we're in a recession -- just ask anybody whose income is below $300,000.

My husband and I are cancelling our health insurance because the monthly premiums are as big as our mortgage payment and we just can't keep giving Golden Rule money when they cover nothing and our deductible is $5000. I called them and asked for an even higher deductible and they said it wasn't available.

Listen to the candidates and support whoever understands that the middle class is getting screwed. That pretty much leaves out the Republicans, except maybe Huckabee, and gosh, why is it that I don't want a president who believes the Bible is the Last Word on everything?

Without a middle class, this country will fail.

And you Canadians: damn it, stop blaming ALL of us for Bush being president. We did what we could but he stole it twice.

[Brian]

Fortunately, being Americans we can frame our own questions as to which side to be on. All revolutions are replaced over time by even more intense police states so the very people advocating one now are just the ones likely to rise to the new captains post. No thankyou. I think we should work on bringing honesty and dignity back to the neighborhood and support good life affirming values. Build a neighbor a garden rather than wreak their fence. We cannot afford a destructive anarchy where meanness takes over what little dignity we have left. It seems many of the problems of paralysis in Washington has to do with the Corporations and well financed special interests have shaped a government to their liking and aren't about to allow any change. Its bigger than the Republican and Democratic parties constantly fighting each other as there really isn't much difference in who is governing except possibly a big decision as to go to war. Our, government has become, the Federal Governments which really has its own priorities, agenda, and free money from us to do whatever it wants with any constraints only a vote from being given away. While a recession will affect many of the people, it will have little effect on the Government's big agenda items. It may cut costs across some domestic programs, but its going to fully fund the military and police and the key three bodies interest sections. Has anyone ever said "the price of government is government" I don't know. I think the paralysis of health care reform, the insurance and pharmaceutical lobbies, says it all, despite the looming medicare and medicaid(states low income health insurance) inability to fund itself. The special interests are looking closely at quarterly profits reports, and who they need to put in power, not needed long term structural changes perpetually put off. By definition they are at odds with the people who work for them. I don't think its yet grasped how off-the-shelf our government has become in being addicted to its own interests, which parallel the special interests. So its really a mirage that there is a republican-democratic debate in this country. That is just a bunch of noise to distract us from whom is really running the show. I just head on the news this week there are 25,000 lobbyists in washington with expense accounts. I don't know if its accurate, but if it is, thats a big special interest army to be occupying our capital.

[cookie]

I agree with much of what Brian said in his earlier posting except the following:

“If there is a recession, it won't affect the big banks and brokerages that much as they have already written puts and hedges against one and stand to even make money with these bets.”

Although there has been a lot of press on the subprime debacle and its role in the recession, the other shoe has not yet dropped. That shoe is CDS – Credit Default Swaps.

Typically, in a recession, the bond market goes up as the stock market goes down. CDS are a relatively new financial derivative. CDS can be thought of in simple terms as a sort of bond insurance, though they are not insurance in the technical sense. CDS are supposed to protect against commercial bond default. In historical terms, commercial bond default has averaged about 1 ¼%. However, unlike historical financial products, the CDS market is not well regulated and this has meant that the CDS have been issued with no reserves to back them. Current estimates are that there are approximately $45 Trillion worth of CDS, greatly exceeding the total value of the bonds they cover. A default rate of 1.25% means a loss of $250 Billion to the credit sellers. If this happens, a snowball effect will be experienced similar to the current subprime default that has spilled over into the credit markets.

This impending meltdown is another reason why the Fed has been lowering interest rates and frantically injecting liquidity (i.e. running the currency printing presses overtime). They are desperately trying to prevent the recession from bearing deeper and triggering other defaults such as CDS.

The impact on the general population is soaring inflation that will eventually turn into hyperinflation either later this year or next. If the hyperinflation is unable to forestall a massive recession and CDS default, it could lead to significant bank and brokerage collapse.

[Colin]

Capitalism is the natural human system. We tried Communism and it failed because human beings like to compete. I just read an article on polygany (multiple wives) It turns out that under the laws of polygany a rich man would have many wives, but a poor man would have none. A poor man today is actually better under monogamy. Human nature is not kind! Capitalism best mimics human nature. Men are into competition and destroying their fellow man. It gives me a rush to beat another man in tennis, in making money, etc. It is not natural for human beings to share. Why would I want to share my money with people I am not related to? This is the most ridiculous proposition! I have to teach my son to share, but I don't have to teach him to hit other kids, or take what he wants. Those are his natural impulses, get it? In many ways human beings are violent, aggressive beings. To the victor go the spoils. It isn't even important to be smart anymore. Everyone here is smart enough. It is who you know, and if you are lucky that determines who becomes rich in our Killer Capitalism system. Everyone here can "cry" and whine as much as they want, but nothing will change. Life is unfair, and it is brutal. People can fantasize about an ideal world, but it will never come to be. Human beings are "selfish" by nature. The Gandhis of the past didn't survive. Study some Evolutionary Psychology and get real. No one cares about how other people are doing. If is cute and heart warming to say so, but it isn't keeping any of you awake at night. I am interested in truth. You may care about your family (blood) and few close friends in a sporting kind of way, but let's get real here. You have to observe how people behave, and not the b.s. that they say. This whole thing is b.s. and probably just an Ego thing for Barbara. Don't you think B.E. knows that nothing is going to happen. It is just amusing to "dream" and think about it. Everyone, including my relatives, moved to America to make money. This was never some ideal experiment over here. America was always about survival of the fittest. It isn't fair, but that is how I see it. Let's cut this thing down to the bare bones, and see human nature, and human systems for what they are. By the way, save your angry responses. I wish things were different as well. I was raised to share and be kind to others, but I quickly got squashed down by other kids until I got tough, and accepted life for what it is. I think most of you are still in the dreaming, adolescent phase, if you can understand what I am talking about.

Colin

[Colin]

Capitalism is the natural human system. We tried Communism and it failed because human beings like to compete. I just read an article on polygany (multiple wives) It turns out that under the laws of polygany a rich man would have many wives, but a poor man would have none. A poor man today is actually better under monogamy. Human nature is not kind! Capitalism best mimics human nature. Men are into competition and destroying their fellow man. It gives me a rush to beat another man in tennis, in making money, etc. It is not natural for human beings to share. Why would I want to share my money with people I am not related to? This is the most ridiculous proposition! I have to teach my son to share, but I don't have to teach him to hit other kids, or take what he wants. Those are his natural impulses, get it? In many ways human beings are violent, aggressive beings. To the victor go the spoils. It isn't even important to be smart anymore. Everyone here is smart enough. It is who you know, and if you are lucky that determines who becomes rich in our Killer Capitalism system. Everyone here can "cry" and whine as much as they want, but nothing will change. Life is unfair, and it is brutal. People can fantasize about an ideal world, but it will never come to be. Human beings are "selfish" by nature. The Gandhis of the past didn't survive. Study some Evolutionary Psychology and get real. No one cares about how other people are doing. If is cute and heart warming to say so, but it isn't keeping any of you awake at night. I am interested in truth. You may care about your family (blood) and few close friends in a sporting kind of way, but let's get real here. You have to observe how people behave, and not the b.s. that they say. This whole thing is b.s. and probably just an Ego thing for Barbara. Don't you think B.E. knows that nothing is going to happen. It is just amusing to "dream" and think about it. Everyone, including my relatives, moved to America to make money. This was never some ideal experiment over here. America was always about survival of the fittest. It isn't fair, but that is how I see it. Let's cut this thing down to the bare bones, and see human nature, and human systems for what they are. By the way, save your angry responses. I wish things were different as well. I was raised to share and be kind to others, but I quickly got squashed down by other kids until I got tough, and accepted life for what it is. I think most of you are still in the dreaming, adolescent phase, if you can understand what I am talking about.

Colin

[Chickensh*tEagle]

Colin: If it's futile to try to improve society, then why do you even bother teaching your son not to steal? To keep him out of jail until he learns the ropes and can figure out how not to get caught?

[Anarcissie]

cookie: "This impending meltdown is another reason why the Fed has been lowering interest rates and frantically injecting liquidity (i.e. running the currency printing presses overtime). ... The impact on the general population is soaring inflation that will eventually turn into hyperinflation either later this year or next. If the hyperinflation is unable to forestall a massive recession and CDS default, it could lead to significant bank and brokerage collapse. ..."

I think there is an additional problem which makes things a bit more complicated than just the government running its printing presses hot. According to W. F. Hummel (see http://wfhummel.cnchost.com/) printed money is _fiat_ money, but what we have now is something else -- we might call it credit money. The money is not even printed; it's simply believed in. And much of it is created privately.

If this is true, the collapse of the present system might not be hyperinflation but radical deflation, as people stopped believing in the various forms of imaginary wealth they now believe in.

Something like this happened with the subprime mortgage racket. What was supposed to happen was that people with probably inadequate incomes would buy houses with dubious mortgages. If they failed to keep up payments, no problem -- because the price of real estate was constantly rising without regard to value, they or the mortgage bank could always sell the house to someone else and get the money back. But when people stopped believing in the inevitability of rising real estate prices, the game broke down. Then the rackets dependent on _that_ racket broke down. There is a widening circle of breakdown, a sort of economic black hole, that Mr. Bernanke is going to try to stuff with fresh fictions.

As usual, most of the liberal and leftist commentary I see is completely unaware of this problem. They seem to see money as something hard and factual, like gold coins -- we can just take some from the rich and give to the poor and all will be well. It's not like that at all. Most of the money, most of the alleged wealth, is _fiction_. And of course most of the figures published about it, and the things measured with it,partake of the same fiction. It is quite possible now for a lot of it to simply disappear instantly.

[Robin LESLIE]

Neo-liberalism (market fascism) is meeting its nemesis, though desparate efforts will be made to prop it up, like the intensification of incarcerations, criminalising trivial deviance, and workfare (forcing the poor to take vacuous mindless and humiliating tasks) We need to make it absolutely clear, MARKET CAPITALISM IS COLLECTIVE VIOLENCE, the organized pursuit of VICE! It is entirely unsustainable and the sooner we save our people and planet from this destructive violence the better.
I speak from the UK, we need to abandon the so-called Anglo-American reconstructionist Myth (Lie) imposed after 1980!

[Robin LESLIE]

It's not a matter simply of political ideologies! There is a real danger here to ALL of us, and ideas alone aren't going to save us from globalised violence. It's patently clear that we must face up to the violence in ourselves, as well as the violence that is projected through the market system
and political institutions.
The sacrifice of Jesus Christ on the Cross shows us our real and deep-rooted violence and how we need to stop projecting that violence onto others!
Period!

[roger]

" MARKET CAPITALISM IS COLLECTIVE VIOLENCE, the organized pursuit of VICE! "

good morning. so when henry ford offered employment to unskilled labor and paid wages of $5 per day this was violence. when unskilled workers gain entrance to this country and are employed at tyson foods for wages far exceeding any economic prospects they could ever dig up in their God forsaken village in the andes and send hard currency back home to support their starving spouse and children this is violence. when somali immigrants with no education, nor skills, nor english proficiency gain employment in minneapolis as taxi drivers and send wages back home to africa this is violence. your entire argument fails logic.

[roger]

collective violence as expressed in general suppression of worker rights and civil rights is present at many levels in society as a whole. for you to simply point an accusatory finger at capitalism and then without explanation nor introduction include incarceration for what you call deviance is irresponsible. heaven forbid some slob makes a little money. and whatever you do dont hold people to the law.

[cookie]

Anarcissie (cool name) - I am well aware of fiat money. I should have caveated "printing press" with "metaphorically speaking".

Strong arguments can be made as to whether we are headed for inflation, deflation, or an inflationary recession.

I believe we are headed towards inflation. An excellent discussion of inflation vs. deflation and current federal reserve policy can be found here:

http://www.financialsense.com/fsu/editorials/ciovacco/2008/0114.html

[Larry In Lethbridge]

I gotta agree with Colin on may of his points.

How can you get the black population to be a positive contributing factor to society ? I mean if I see one more episode of the " The First 48" where young black men kill for a few bucks, I just may never leave Alberta for the US again.

[Anarcissie]

Inflation will occur if the US authorities can continue to control the situation. But the situation may go out of control because there has already been so much inflation, and so much of it is, as I said, not even printed money but a belief in something intangible.

[Brian]

The tripling of average housing prices around the major metropolitan regions in the past decade is a good example of hyperinflation relative to real earning power of ordinary working people. This has occured during a time they have lost their pensions from corporate America. In a nutshell, their incomes and lifetime savings has been raided by corporate insiders as their government has abandoned them to the wolves. Its a great reallocation of wealth in our time. The 45 trillion dollars worth of credit default swaps,etc., essentially a huge credit cross-holding game across many large institutions is not real money, only promises of compensation given certain events. What is real money is that taken from the middle and lower working classes and kicked upstairs to those that hold the power, the laws, and strings. Housing prices, cars, college, medical care, many services etc have already been hyperinflated while pocket electronics has been deflated because they keep the subscriber base going. Now that a large correction and bear market are in the works, jobs will be lost, demand will be crimped, and prices will stop short their steep ascent. The devaluation of the dollar is as much due to lack of global confidence in our competence as a "balanced economy" as developing countries own new found wealth as "outsourced manufacturers" and incipent domestic economic growth. Its fair to say the total economic losses due to greed, lack of regulation, and fraudulent imcompetence may approach 1-2 trillion before its all over, almost the loss of the tech/net boom of the 90's. Note the most recent decision of the Supreme Court to eliminate shareholder suits of the class action(and affordable) kind to protect the corporate banking, brokerage, and big institutional interests from having to pay the piper. Its also interesting to note for all the power and immunity they wield, many of their managers made huge blunders in faulty risk management costing their institutions and shareholders billions while they walked away with multimillion dollar packages. Also note the FCC has just approved allowing even further concentration of the various media platforms in the hands of just a few huge media conglomerates. It just goes on and on, and while everyone has had their eyes focused through constant fear campaigns on Iraq and Afghanistan, so much that formerly belonged to the people has been wantonly given away to the corporations. Those in power have no shame, and now their lobbiests will simply try their very best to push through more favorable legislation to even further go after more and more. This is unbridled large scale unregulated capitalism in which the strong simply squash the weak and go for it all. Capitalism, even by Adam Smith, was meant for small scale enterprises each working to the advantage of society their particular specialties. He never sanctioned today's kind of concentrated wealth among a few hundred corporations in which less than a hundred control almost everything including our government. I suggest you read his original essays and you will see how distorted today's argument by the right is about the virtues of our kind of capitalism. Its greed without concience and narcissism with an animal aggressiveness. Ultimately it goes to the vanity and greed of the people who rule us and their imaginary self serving arguments about why they are right and we don't matter.

[Deborah]

Apocalypse aside, the mantra of growth has deceived us for far too long. What it translates into is: Don’t worry about the relative size of your slice, just concentrate on growing the pie! Now, with a recession threatening even more suffering for those who are already struggling, may be the perfect time to get out the pie-cutter again.

How about we do it by mommy rules: Management gets to cut the pie, but the employees get to choose which slice they get.

I agree with wafranklin. It is long past time for outright rebellion. I wonder what it will take besides war, economic downturn, and a president who thinks he's above the law.

Have Americans become so opressed we can no longer fight back or are we just complacent?

[k8e]

How can anything grow forever? Growth that never stops is called cancer.

[Robin LESLIE]

This crisis of corporate capital is having some interesting effects! Firstly it is not simply exploding, collapsing from without, but, imploding from within. When a system collapses externally, a bit of social engineering can usually be devised to hide the structural fractures! When a system collapses from within, then the control function is itself impaired, and, I argue, that is what is happening with corporate capitalism right now! The British experiencve is an interesting one! Here we have had a revisionist Labour Party, operating a junk State, an uneasy coalition of incompatible interests, in the context of an increasingly hostile
and resentful British public! Vaclav Havel, the Czech author was right about Western States, donning the mantle of private tyrannies, the State serving the political interests of corporations, and professionals as clones in the process!
In the process of tying everything to the corporate machine however, the professionals ethics have been abandoned, and decisions in, for example, clinical medicine, are being taken by managers in the corporate business interest! Every thing, person, becomes a functionary of the Corporate machine, which tolerates no resistance! Ironically of course real resistance is now growing, so that a clear and distinct ideological alternative is now emerging based on an organic ecology and a humanised society free of the machine view of the world, that has prevailed since the 17th century. This alternative emerges at the most decisive point in human history viz. the decline of the planet by human hands! That is why corporate capitalism was the last chapter of human arrogance and conceit!

[Jacqueline Homan]

The problem is that the unemployment figures are NOT accurate. Anyone who is unemployed after unemployment benefits expire is not counted among "the unemployed." Anyone who is ineligible to collect unemployment benefits is not counted among the unemployed. And let us not forget those middle-aged job-seekers who have become discouraged after not getting chances for jobs after going three years or more without getting a chance for a job, and have given up (not because they're "lazy"), because they feel like what's the point when trying upon trying upon trying has gotten them nowhere.

When you're unemployed for a year or more, employers, including many temp agencies, will not hire you...Your "unemployment gap" is held against you and so you can't get a job because you're seen as "defective."

Have bad credit due to the death spiral of downward mobility and poverty? Kiss any hope of getting a job good-bye since the use of your credit score in poverty-profiling hiring practices will ensure you probably will remain jobless - and hence remain poor.

Disabled but able to work at as a cashier for the current federal minimum wage? Fat chance when employers make it a condition of employment to stand, refusing to accommodate you by allowing you to do that job while sitting. The ADA was supposed to change that; and end the marginalization of people with medical/health problems who need jobs...but the clause in "Employment At-Will" basically gives employers free reign to skirt age and disability discrimination laws.

Oh, and let's not forget that getting a job anywhere anymore is all about who you know, and who you know is directly related to the social networks you have which are based on your socio-economic strata. Friendships, networks, social ties, etc., that may be available to those in the middle and upper classes are NOT open and available to those who have been marginalized and left out.

[alban]

There is nothing natural about corporate capitalism, anymore than the 'countryside' we preserve is natural. Both are artifacts of our own creation.

The present system (apart from being grossly unfair and extremely inefficient) is also slow to adapt and slow to predict or solve the real supply problems that effect millions of people.
Defenders of the system: Please justify what is happening right now to the price of rice.
Also explain why we still travel in heavier than air vehicles, and why our cars burn oil.
There is no hidden benign intelligence at work in the so called free market.

[Gloria Diaz]

I went to college and got a bachelor’s degree and a string of crappy, low-paying jobs. I went back to school to learn to drive a truck, and after eight tries, passed the CDL test. I got fired as a trucker, and may not drive again for three years, due to some minor backing accidents. I feel like no matter what I do, nothing will allow me to become middle class on my own. When my parents were still alive, I was secure, but since my mother has been gone, I’ve struggled. What am I doing wrong? The last time I was able to pay my bills and set a little aside, was when I working three jobs. Then, I lost two of those jobs through no fault of my own, and I was back to my part-time day job. I’m seeking public assistance to help with utilities and my boyfriend’s mother, who is on disability, gave me a months’ worth of groceries out of her kitchen to tide me over. I’m living my worst nightmare, which is not being able to take care of myself. I feel ashamed and a failure.

[Vineet]

Hi,

The recent melt down of global markets will result in lot of retrenchments.
I feel that following industries are least prone to recession :
1. Education
2. Health care, Weight loss,
3. Any thing related to Religion – may be you can become a “Swami” or “Guru”
4. Ladies fashion industry and
5. High end product market

On-line income can also be made recession proof by right kind of mix of multiple income streams.

Vineet Aggarwal
www.ILoveExtraCash.com
http://www.ezinfocenter.com/7865808/MM

[ben]

The problem started because americans start putting things like GAS on their credit cards.. and now have nothing to show for it. We all are suppose to use the credit cards when we need a little extra help. Now They Maxed! There is no extra money. Its gone. Bail out after bail out, the banks, credit companies, and so forth will be saved, the people will get screwed, and somehow a ceo will still have his new benz every year and a huge bonus. God bless them. Frankly if people exercised some self control and showed some personal responsibility (like not buying a house they knew they couldn't afford), they would be better prepared for situations like we are now experiencing. I have changed absolutely nothing in my daily life because of the recession. But those "spenders" should stop buying gucci handbags and crocs and start focusing on if they will be fed 5 years from now. I found a new forum http://fightagainstrecession.com/index.php that will surely help you address your worry over the global recession, vent about financial stuff and share money-saving tips.