The Economic Recovery Hoax

[Nbadan]

There's no free happy meals!

As I've reported here several times in the past, there has been no economic recovery for most of you since Dubya took office, unless you live off investments or make over $150K per year. It's all a hoax by the M$M and Wall Street who would like no better than for you to keep spending and keep burying yourself further into debt you will find increasingly hard to pay off in the future...

Rising economic tide fails to lift poor, middle class

There's an old saying that "a rising tide lifts all boats." Popularized by President John F. Kennedy, it generally refers to how a growing economy benefits everyone.

These days, however, it might need to be revised to say: "A rising tide lifts all yachts." Or perhaps it should be retired entirely, because it no longer appears to be accurate.

That's the inescapable conclusion from Tuesday's Census Bureau report on poverty. Some 37 million Americans lived below the poverty line ($19,971 for a family of four) in 2005 — that's 4 million more than at the height of the last recession, in 2001.

The same report showed that the median annual income of $46,326 was essentially unchanged from where it was in 2001, and that the ranks of those without health insurance, now at 46.6 million, continue to grow.

What makes the numbers so troubling is that they come four years into an economic recovery that by other measures has been robust. From 2001 to 2005, the gross output of the economy increased by about 12% above the rate of inflation, worker productivity surged and corporate profits doubled.

USA Today

Continue to cripple the working class, reduce the power of the middle class and keep the rabble fighting over low wage jobs. This is conservative economic goal setting and execution in action.

[Ya Vez]

More broadly, the numbers show what a horrible job the nation is doing in providing the education and job skills its citizens need to compete. The principal problem is not that the economy is producing too few good jobs. It is that society is producing too many unskilled workers.

Government is very good at spending money on programs that support key cons uencies. Benefit programs, led by Social Security and Medicare, make up more than half of all federal spending.

But government is not very good at investing in the future. If society cannot figure a way for everyone to share in the nation's economic growth, future tides could be shallow indeed.

also from the same article....

[jochhejaam]

Accurate indicators that allow consumers to come to intelligent conclusions regarding the economy are readily available to anyone interested. With that in mind, promoting an "economic recovery hoax" does little more than reinforce that you're a hopeless partisan.

For those interested, the following is a good site for "no spin" statistics on the current state of the economy.

http://www.nam.org/s_nam/doc1.asp?CID=202559&DID=236946

[Aggie Hoopsfan]

Just because people are irresponsible in their spending and savings habits doesn't mean the economy sucks.

The average American lives beyond their means, many having racked up several thousand in credit card debt and living with less than a month's worth of expenses stored in savings.

The problem isn't the economy, it's that we live in an instant gratification society. Want a new 50" plasma? Fine, go open up a store credit card and put that $3000 purchase on it.

Want a new car to impress everyone with? Sign an auto loan with 6% interest and pay $500 a month on it.

There's something to be said for personal fiscal responsibility, and it's not the government's fault that people don't have any. I guess it's the government's fault they're not subsidizing HDTV purchases or providing financial planning classes for free.

What's funny is Bush brought up a plan to force mandatory savings accounts for everyone to change the social security problem we're facing, but libs in the Senate screamed bloody murder and it was dead on arrival.

Yeah, that's all Bush's fault

[Clandestino]

i believe 95% of people can save money if they want to.. all they'd have to do is stop wasting money on .. i talk to so many people who say they can't save because they live paycheck to paycheck...however, they somehow have money to buy beer, potato chips, and other like that...

[Jamtas#2]

I wouldn't blame just Bush on this one, but I do agree that the economic situation of our country needs to be fixed. Our society's instant gratification has been the result of one of our nation's best abilities, advertising. I manage many minimum wage (or close to it) workers who I see wasting their hard earned money left and right. A single working mother making $9 an hour, who for Christmas buys each of her 3 sons a PSP and an xbox 360 for them to share as well along with designer clothes. Now I was lucky enough to grow up in an above middle class home thanks to my parents who both worked. But my parents would never go out of their means, or get close to them to buy us all the latest high tech gadgets and such. I had a talk with her when she told me that she couldn't believe how she racked up so much debt and had creditors on her. She just couldn't let go of the "If I want it, I should be able to buy it no matter the cost. I can pay that off over time" mentality until here she was with maxed out credit cards and repo men taking thier belongings.
While I do agree that personal responsibility has a great bearing on this, people aren't born with that, or born with a sense of economic responsibility. This comes from your home life and from the education system. And our education system is failing. Now I used to be one of the people who just blamed the parents or the individual ("I worked hard in school, why can't everyone else" kind of thinking) But I believe that while the upbringing is probably the most important aspect for change, we need to have an education system where all students are taught the basics of economics, the value of money, the dangers of credit debt, living within your means, etc. I also believe that the government needs to help address this situation. While it is good to say that it is up to a person's own responsibility to learn this and live by it, it does our society no good to ignore the problem and not address it. Our education system needs reform or we will pay the price for it when we have a much larger percent of our population made up of uneducated, live for gratification, politically uninvolved and economicly untrained people. Parents need to play a large role in encouraging their children, but I just don't think we as a country could afford the repercussions of inaction.

[Aggie Hoopsfan]

I agree with you Jam.

You don't really learn personal finance unless your folks teach you or you take a class in college. It really needs to be taught in HS.

[101A]

I wouldn't blame just Bush on this one, but I do agree that the economic situation of our country needs to be fixed. Our society's instant gratification has been the result of one of our nation's best abilities, advertising. I manage many minimum wage (or close to it) workers who I see wasting their hard earned money left and right. A single working mother making $9 an hour, who for Christmas buys each of her 3 sons a PSP and an xbox 360 for them to share as well along with designer clothes. Now I was lucky enough to grow up in an above middle class home thanks to my parents who both worked. But my parents would never go out of their means, or get close to them to buy us all the latest high tech gadgets and such. I had a talk with her when she told me that she couldn't believe how she racked up so much debt and had creditors on her. She just couldn't let go of the "If I want it, I should be able to buy it no matter the cost. I can pay that off over time" mentality until here she was with maxed out credit cards and repo men taking thier belongings.
While I do agree that personal responsibility has a great bearing on this, people aren't born with that, or born with a sense of economic responsibility. This comes from your home life and from the education system. And our education system is failing. Now I used to be one of the people who just blamed the parents or the individual ("I worked hard in school, why can't everyone else" kind of thinking) But I believe that while the upbringing is probably the most important aspect for change, we need to have an education system where all students are taught the basics of economics, the value of money, the dangers of credit debt, living within your means, etc. I also believe that the government needs to help address this situation. While it is good to say that it is up to a person's own responsibility to learn this and live by it, it does our society no good to ignore the problem and not address it. Our education system needs reform or we will pay the price for it when we have a much larger percent of our population made up of uneducated, live for gratification, politically uninvolved and economicly untrained people. Parents need to play a large role in encouraging their children, but I just don't think we as a country could afford the repercussions of inaction.

First; counting on the government to educate our population is what got us into this mess in the first place.* Second; the government having control over, basically, a person's ability to access their credit is NOT going to happen. The ACLU, not to mention the US Chamber of Commerce, will fight pretty hard on that one.

* Side note; My wife is a professor at a medium sized (15,000 students), public, 4 year university in Pennsylvania. Graduating students with the lowest test scores? Education Majors. Second Lowest? Journalism.

[RandomGuy]

The debt will not get us, although it will contribute.

Education will get us.

In a comparison of eight European and North American countries, Britain and the United States have the lowest social mobility
Social mobility in Britain has declined whereas in the US it is stable
Part of the reason for Britain's decline has been that the better off have benefited disproportionately from increased educational opportunity
Researchers from the Centre for Economic Performance at the London School of Economics and Political Science (LSE) have compared the life chances of British children with those in other advanced countries for a study sponsored by the Sutton Trust, and the results are disturbing.

Jo Blanden, Paul Gregg and Steve Machin found that social mobility in Britain - the way in which someone's adult outcomes are related to their cir stances as a child - is lower than in Canada, Germany, Sweden, Norway, Denmark and Finland. And while the gap in opportunities between the rich and poor is similar in Britain and the US, in the US it is at least static, while in Britain it is getting wider.

A careful comparison reveals that the USA and Britain are at the bottom with the lowest social mobility. Norway has the greatest social mobility, followed by Denmark, Sweden and Finland. Germany is around the middle of the two extremes, and Canada was found to be much more mobile than the UK.

Comparing surveys of children born in the 1950s and the 1970s, the researchers went on to examine the reason for Britain's low, and declining, mobility. They found that it is in part due to the strong and increasing relationship between family income and educational attainment.

http://www.lse.ac.uk/collections/pre...ust_report.htm

The death of the American dream.

If our country is a real land of opportunity, why does France outrank the US in terms of poor people having a chance at climbing the social ladder with a meaninful education?

[Crookshanks]

Much of the problem is a failure of personal responsibility. I would hazard a guess that most of the people living below the poverty line are single moms with several children or immigrants (legal and illegal) that have not learned English and are not assimilating into American society.

However, I work at HEB part-time and I see so many welfare moms and non-english speaking people (mainly Hispanic and African) paying for their food with food stamps; yet they all have cell phones, and many of them have numerous body piercings and tattos. How are they paying for all that? And most of them are not using cabs or the bus - they have cars.

Those people I have no sympathy for - they just irritate the fire out of me!

[Nbadan]

While I do agree that personal responsibility has a great bearing on this, people aren't born with that, or born with a sense of economic responsibility. This comes from your home life and from the education system. And our education system is failing. Now I used to be one of the people who just blamed the parents or the individual ("I worked hard in school, why can't everyone else" kind of thinking) But I believe that while the upbringing is probably the most important aspect for change, we need to have an education system where all students are taught the basics of economics, the value of money, the dangers of credit debt, living within your means, etc. I also believe that the government needs to help address this situation. While it is good to say that it is up to a person's own responsibility to learn this and live by it, it does our society no good to ignore the problem and not address it. Our education system needs reform or we will pay the price for it when we have a much larger percent of our population made up of uneducated, live for gratification, politically uninvolved and economicly untrained people. Parents need to play a large role in encouraging their children, but I just don't think we as a country could afford the repercussions of inaction.

That's funny, I recently posted 2 studies that prove that public education can be just as just as good if not better than private education. For all of our 'educational failure', the U.S. has one of the highest per capita rates of bachelor and graduate degrees. So obviously, some kids do get it, but no amount of teacher prodding is going to motivate a student who just doesn't have the fore-sight to appreciate the full benefit of the education they are receiving. There are just some people who are lazy and don't want to do the work, especially when it comes to Math and Science. I agree with you though, even high school students should have a course in personal finance

[Nbadan]

Much of the problem is a failure of personal responsibility. I would hazard a guess that most of the people living below the poverty line are single moms with several children or immigrants (legal and illegal) that have not learned English and are not assimilating into American society.

It's too easy to stero-type. Fact is, workers are working more hours per week than ever before, the productivity rate of U.S. workers has risen, and companies are making record profits. You can pass all the blame you want, but it would be short-sighted if the first people you didn't blame where those in the management and board-rooms carefully stroking their bonuses and profits at the expense of their employees.

[Extra Stout]

Much of the problem is a failure of personal responsibility. I would hazard a guess that most of the people living below the poverty line are single moms with several children or immigrants (legal and illegal) that have not learned English and are not assimilating into American society.

However, I work at HEB part-time and I see so many welfare moms and non-english speaking people (mainly Hispanic and African) paying for their food with food stamps; yet they all have cell phones, and many of them have numerous body piercings and tattos. How are they paying for all that? And most of them are not using cabs or the bus - they have cars.

Those people I have no sympathy for - they just irritate the fire out of me!

There are a handful of behaviors that, if practiced, make poverty very unlikely -- things like graduating from high school, avoiding having children until adulthood, getting married... but not until adulthood, working at a job, any job, etc. The culture of the underclass, and in many ways American pop culture in general, belittles a lot of these behaviors.

When children grow up in households with no structure, with no emphasis on the value of education or the value of work, I don't care how much money we spend on education, those kids are not going to be able to learn. You can't have a 7-year-old being drug around Wal-Mart at midnight, and expect that child to be ready to learn the next morning.

Nor it is fair to 100% blame parents who grew up with little education or life coping skills for failing to fend off all the destructive influences of popular culture and the outside world on their children. Yes, a big part of it falls on them, but some also falls on a society where it is perfectly OK for big companies to spend billions on PhD psychologists to develop advertising campaigns aimed at getting children to wear down their parents' resolve and authority, all so they can sell more sugary snacks.

Long ago we chose to sell out our culture for profit, to appeal to the lowest common denominator. We strip-mined our society for the almighty dollar. We replaced the values of family, community, and charity with the impulse to buy, buy, buy. Self-esteem comes from things. Success comes from things. You are what you can buy. Companies got what they wanted -- a society of consumerist drones for whom any wealth they might come to obtain slips right back through their fingers for trinkets of no value (cell phones, body piercings, etc.). We could embark on the greatest income redistribution program in world history in this country, and within a few years, all the wealth would be back in the same hands.

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I guess the "Hispanics failing to assimilate" must be a San Antonio/South Texas thing. I don't see it. Where I am, Mexican immigrants completely outperform the U.S.-born underclass. If they don't learn much English, it's because they are spending so much time working. Their kids always speak good English. The Hispanics who fall into the underclass often are latter-generation ones who have assimililated; unfortunately, American culture has become of late so perverse and degenerate that upon assimilation the Mexican work ethic gets replaced with the American sense of en lement.

[Spurminator]

I guess the "Hispanics failing to assimilate" must be a San Antonio/South Texas thing. I don't see it.

Some evidence that young Hispanics are becoming more and more acculturated can be found on recent Arbitron Radio ratings... Where Spanish-speaking Teens are measured, it's now very common to find mostly English radio stations at the top of the ratings. Many Hispanic stations have begun adopting "Spanglish" formats and accepting Spanglish/English advertising.

[Ocotillo]

I have always contended people's view of the economy is personal. No matter what government reports or newspaper articles say, people look at their own personal situation and determine whether the economy is "good" or "bad".

[boutons_]

[RandomGuy]

First; counting on the government to educate our population is what got us into this mess in the first place.* Second; the government having control over, basically, a person's ability to access their credit is NOT going to happen. The ACLU, not to mention the US Chamber of Commerce, will fight pretty hard on that one.

* Side note; My wife is a professor at a medium sized (15,000 students), public, 4 year university in Pennsylvania. Graduating students with the lowest test scores? Education Majors. Second Lowest? Journalism.

Is not the government where we pool our collective resources to do things that we can't do individually?

I dunno about you, but I wouldnt' have the first clue as to how to build bridges or regulate air traffic safety standards.

[RandomGuy]

Productivity slows, wages post increase

http://news.yahoo.com/s/ap/20060906/..._ec_fi/economy

Wages registered a second sizable increase, rising at an annual rate of 4.9 percent in the second quarter, up from an initial estimate of a 4.2 percent increase — good news for workers, but the kind of development that leads the Federal Reserve Board and economists to worry about inflation.

The second quarter increase followed an even larger 9 percent surge in labor costs in the first three months of the year, which was the biggest quarterly increase in nearly six years.

Some good news at last.

Now if it would just rise enough to afford health insurance...

[101A]

Is not the government where we pool our collective resources to do things that we can't do individually?

I dunno about you, but I wouldnt' have the first clue as to how to build bridges or regulate air traffic safety standards.

Usually follow you RG, but not this time.

I was responding to teh author's contention that somehow the govt. ought to be able to restrict a person's access to THEIR OWN credit in order to help keep that person from behaving foolishly with that credit. My point was; the government, again according to the author, is the ins ution which failed to educate the individual in the first place as to the best way to manage their money; that government is most likely ill-equipped to manage the individual's money vicariously. The US govt. after-all is the single largest debtor in the known universe.

BTW, the lack of social mobility can be traced on a time-line almost directly to two factors (although there is no study which asserts there is a causality between them, just kind of the elephant in the living room):

1. The War on Poverty ("You get what you pay for axiom". Pay for people to be poor, you will probably get poor people).

2. A surge of non-English speaking immigrants from Asia & S. America.

[101A]

Productivity slows, wages post increase

http://news.yahoo.com/s/ap/20060906/..._ec_fi/economy



Some good news at last.

Now if it would just rise enough to afford health insurance...

Unfortunately our entire system of heath insurance is designed for the employer to provide it (that's where the tax credits are - and all of the federal regulation is aimed at employer controlled health plans). Individual plans are still underwritten and managed by the insurance company's own standards. Sick people can get dropped, or their rates raised beyond comprehension, EXACTLY when they need the insurance the most. Insurance company's come by their bad reputations, I am afraid, honestly.

[101A]

The point of my last post being (forgot to get there), is that wages going up won't get more people covered with "good" plans; business revenues going up, or healthcare costs going down, might.

[RandomGuy]

Usually follow you RG, but not this time.

I was responding to teh author's contention that somehow the govt. ought to be able to restrict a person's access to THEIR OWN credit in order to help keep that person from behaving foolishly with that credit. My point was; the government, again according to the author, is the ins ution which failed to educate the individual in the first place as to the best way to manage their money; that government is most likely ill-equipped to manage the individual's money vicariously. The US govt. after-all is the single largest debtor in the known universe.

Oops. Sorry about that. I took it a bit out of context.

Although on a side note, I am all for mandatory financial education.

Why teach somebody reading and math, but not basic financial concepts? We would all benefit.

[RandomGuy]

BTW, the lack of social mobility can be traced on a time-line almost directly to two factors (although there is no study which asserts there is a causality between them, just kind of the elephant in the living room):

1. The War on Poverty ("You get what you pay for axiom". Pay for people to be poor, you will probably get poor people).

2. A surge of non-English speaking immigrants from Asia & S. America.

I applaud your honesty on that. You won a few respect points in my book.

I think that one would be hard pressed to assume causality between the "war on poverty" and lack of social mobility.

There were and are so many other factors that provide plausible explanations that fit better. Globalization, and the fact that the economy simply wasn't growing as fast after the post-ww2 boom, as the rest of the world started catching up, are the two that come to mind immediately.

[101A]

...
Although on a side note, I am all for mandatory financial education.

Why teach somebody reading and math, but not basic financial concepts? We would all benefit.

Here's the good news: The school district we are now sending our children to in PA has a mandatory "Home Science and Economics" course (1 semester)

The bad news? So far all they've learned has been three different styles of place settings. (Casual, Dinner, & Formal)

[Yonivore]

Okay, let's look at the meat of the article posted by NBADan:

That's the inescapable conclusion from Tuesday's Census Bureau report on poverty. Some 37 million Americans lived below the poverty line ($19,971 for a family of four) in 2005 — that's 4 million more than at the height of the last recession, in 2001.

Any person of average intelligence would say, "Hey, hasn't the population of the country been growing? And wouldn't a more accurate measure be some kind of, you know, 'poverty rate?' You know, like the percent of the population that's under the poverty threshold?"

And by golly, those good men and women at the Census Bureau have calculated just such a thing. They call it; now get this: THE POVERTY RATE!

Those crafty devils!

Well here's a chart FROM THAT SAME DAMNING CENSUS REPORT that shows the poverty rate put in the context of several decades instead of just the past couple of years.



With a little common-sense context we see that the poverty rate, though ever so slightly up, is still technically at a historic low. Thus, official economists would come to the professional conclusion that;

"People should shut the up and stop their whining. Poverty is not a problem in America."

The same report showed that the median annual income of $46,326 was essentially unchanged from where it was in 2001,

Again, let's go to the chart:



When you look at it you'll notice them nice slim shady lines. Those are recessions. Notice after each recession how real incomes historically have dropped and then recovered, as you would normally expect them to do? So perhaps this is just a manifestation of a normally functioning economy.