Comments on: Pity the US consumer? http://www.nakedcapitalism.com/2008/08/pity-us-consumer.html Mon, 23 Nov 2009 01:53:25 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: David http://www.nakedcapitalism.com/2008/08/pity-us-consumer.html#comment-12604 David Wed, 06 Aug 2008 11:42:00 +0000 http://www.nakedcapitalism.com/2008/08/pity-the-us-consumer/#comment-12604 That Bernstein letter to the editor (NYTimes didn't say it was op-ed, but it was) made me worry and smile a little. <br/><br/>I help build those over priced houses and wondered how do people afford these mortgages? Now I know. They can't. <br/><br/>Also, as more of a reporter than the alleged reporter Bernstein (a financial guy) I hearby report that on my recent trip to Bryce Canyon National Park in Utah, Foreign visitors seemed to be a larger percentage than before...but overall tourism is down and that many motels and hotels were close to being empty except the closest ones to the park. French and German was very common on the lovely trails down into the hoodoo red rocks and the temps weren't bad for summer. Also a notable number of Brazilians. Surprise, not! Energy independence and social democratic policies seem to be working. And Americans seemed to be quieter, just plugging along. <br/><br/>A skier told me back in the 70s that you could tell who's up and who's down internationally at the ski slopes by who was the loudest and brashest on the slopes. We'll see how it is coming this winter. <br/><br/>But really the first comment was 'spot on'. Our war on Terror is just terrorizing US. Just flying domestically was bad enough. And it's not just the US. My stepson had a miserable experience at Heathrow, and had to buy another plane ticket as a result of security delays. That Bernstein letter to the editor (NYTimes didn’t say it was op-ed, but it was) made me worry and smile a little.

I help build those over priced houses and wondered how do people afford these mortgages? Now I know. They can’t.

Also, as more of a reporter than the alleged reporter Bernstein (a financial guy) I hearby report that on my recent trip to Bryce Canyon National Park in Utah, Foreign visitors seemed to be a larger percentage than before…but overall tourism is down and that many motels and hotels were close to being empty except the closest ones to the park. French and German was very common on the lovely trails down into the hoodoo red rocks and the temps weren’t bad for summer. Also a notable number of Brazilians. Surprise, not! Energy independence and social democratic policies seem to be working. And Americans seemed to be quieter, just plugging along.

A skier told me back in the 70s that you could tell who’s up and who’s down internationally at the ski slopes by who was the loudest and brashest on the slopes. We’ll see how it is coming this winter.

But really the first comment was ’spot on’. Our war on Terror is just terrorizing US. Just flying domestically was bad enough. And it’s not just the US. My stepson had a miserable experience at Heathrow, and had to buy another plane ticket as a result of security delays.

]]> By: Anonymous http://www.nakedcapitalism.com/2008/08/pity-us-consumer.html#comment-12547 Anonymous Tue, 05 Aug 2008 03:54:00 +0000 http://www.nakedcapitalism.com/2008/08/pity-the-us-consumer/#comment-12547 Anon,<br/><br/>Your indicator for civility appears to be a youtube video.<br/><br/>Can you provide data for similar videos prior to the onset of the <br/>housing market correction?<br/><br/>Please do so also for the number of food or other riots.<br/><br/>Debatably the food riots etc. are a result of the <br/>policies of the boom and the chosen cure. Anon,

Your indicator for civility appears to be a youtube video.

Can you provide data for similar videos prior to the onset of the
housing market correction?

Please do so also for the number of food or other riots.

Debatably the food riots etc. are a result of the
policies of the boom and the chosen cure.

]]> By: Anonymous http://www.nakedcapitalism.com/2008/08/pity-us-consumer.html#comment-12528 Anonymous Mon, 04 Aug 2008 22:44:00 +0000 http://www.nakedcapitalism.com/2008/08/pity-the-us-consumer/#comment-12528 WTF, why is Toto always left out in the rain like a forgotten dog... WTF up, Toto IS the story! WTF, why is Toto always left out in the rain like a forgotten dog… WTF up, Toto IS the story!

]]> By: Eric E http://www.nakedcapitalism.com/2008/08/pity-us-consumer.html#comment-12524 Eric E Mon, 04 Aug 2008 22:28:00 +0000 http://www.nakedcapitalism.com/2008/08/pity-the-us-consumer/#comment-12524 Bernstein's "puzzle" about why consumers can't afford price increases is only a puzzle if you ignore the key fact about consumers' checkbooks - they haven't gotten wage increases commensurate with the expansion of the economy. <br/><br/>Based on their real, inflation-adjusted income, consumers were not really able to afford the lifestyle upon which current consumer-driven industries depend. The housing bubble was all about selling consumers more debt by way of lowering lending standards on their biggest asset. Now that those lines of credit have collapsed under the massive undervaluation of risk (as was essentially inevitable for a bubble of such enormous breadth), consumers have no other money to put into the system, because as a whole, they aren't making any more more money. Yes, the food-and-oil squeeze from rising energy costs is basically a coincidence, but that squeeze would be notably less consequential if median real incomes had grown apace with the economy.<br/><br/>It takes work to build and sustain a middle class through economic transitions (e.g. globalization, automation & information technology, education-centric jobs, etc.), and in our country we've abdicated this work in favor of unbridled capitalism. As a result, our middle class is falling apart - our Gini index is a testament to the basic problem. The puzzle's not really diagnosing the problem, it's figuring out effective ways to get things back in balance so that a reasonable share of GDP growth goes to people of all income levels. Bernstein's "puzzle" about why consumers can't afford price increases is only a puzzle if you ignore the key fact about consumers' checkbooks – they haven't gotten wage increases commensurate with the expansion of the economy.

Based on their real, inflation-adjusted income, consumers were not really able to afford the lifestyle upon which current consumer-driven industries depend. The housing bubble was all about selling consumers more debt by way of lowering lending standards on their biggest asset. Now that those lines of credit have collapsed under the massive undervaluation of risk (as was essentially inevitable for a bubble of such enormous breadth), consumers have no other money to put into the system, because as a whole, they aren't making any more more money. Yes, the food-and-oil squeeze from rising energy costs is basically a coincidence, but that squeeze would be notably less consequential if median real incomes had grown apace with the economy.

It takes work to build and sustain a middle class through economic transitions (e.g. globalization, automation & information technology, education-centric jobs, etc.), and in our country we've abdicated this work in favor of unbridled capitalism. As a result, our middle class is falling apart – our Gini index is a testament to the basic problem. The puzzle's not really diagnosing the problem, it's figuring out effective ways to get things back in balance so that a reasonable share of GDP growth goes to people of all income levels.

]]> By: Paul http://www.nakedcapitalism.com/2008/08/pity-us-consumer.html#comment-12512 Paul Mon, 04 Aug 2008 20:18:00 +0000 http://www.nakedcapitalism.com/2008/08/pity-the-us-consumer/#comment-12512 S: I don't think legislating the share of profit that goes to labour will work when jobs can just be exported (and corporations too for that matter c.f. Halliburton)... It naturally swings back when the workforce have been squeezed dry of any remaining ability to borrow and consume. That is happening now.<br/><br/>DH: Toto as blogger. I like that. I think in the olden days it would have been the press.<br/><br/>I'm avoiding the USA as well for the past few years. Last time through LAX - just to change to another international flight - we waited in six lines for a total of four hours. S: I don’t think legislating the share of profit that goes to labour will work when jobs can just be exported (and corporations too for that matter c.f. Halliburton)… It naturally swings back when the workforce have been squeezed dry of any remaining ability to borrow and consume. That is happening now.

DH: Toto as blogger. I like that. I think in the olden days it would have been the press.

I’m avoiding the USA as well for the past few years. Last time through LAX – just to change to another international flight – we waited in six lines for a total of four hours.

]]> By: Mara http://www.nakedcapitalism.com/2008/08/pity-us-consumer.html#comment-12510 Mara Mon, 04 Aug 2008 19:06:00 +0000 http://www.nakedcapitalism.com/2008/08/pity-the-us-consumer/#comment-12510 The wizard should be taking it in the shorts, but he's the only one being saved. Munchkins into the shredder.<br/>There is a lot of animosity toward homeowners, but they are not the ones who oversold the paper. The finance guys should be going to jail for the fraud. The shareholders and bondholders should go bust--I mean, they are the ones who want the reward for the risk, well here's the risk part. There was a good article on WebOfDebt.com (http://www.webofdebt.com/articles/bracing-storm.php) specific to housing fraud. I look forward to more BK judges asking for the paperwork, and the trustees not having it. "Case dismissed!" The wizard should be taking it in the shorts, but he’s the only one being saved. Munchkins into the shredder.
There is a lot of animosity toward homeowners, but they are not the ones who oversold the paper. The finance guys should be going to jail for the fraud. The shareholders and bondholders should go bust–I mean, they are the ones who want the reward for the risk, well here’s the risk part. There was a good article on WebOfDebt.com (http://www.webofdebt.com/articles/bracing-storm.php) specific to housing fraud. I look forward to more BK judges asking for the paperwork, and the trustees not having it. “Case dismissed!”

]]> By: Anonymous http://www.nakedcapitalism.com/2008/08/pity-us-consumer.html#comment-12506 Anonymous Mon, 04 Aug 2008 16:25:00 +0000 http://www.nakedcapitalism.com/2008/08/pity-the-us-consumer/#comment-12506 Re: toxic mortgages were leveraged (up to 30 times)<br/><br/>That must have been with a conservative bank like Wells Fargo, cause 60 to 80 is far more realistic -- but so what, they write it off and re-state earnings or just wait a few years to recoup losses. Re: toxic mortgages were leveraged (up to 30 times)

That must have been with a conservative bank like Wells Fargo, cause 60 to 80 is far more realistic — but so what, they write it off and re-state earnings or just wait a few years to recoup losses.

]]> By: Anonymous http://www.nakedcapitalism.com/2008/08/pity-us-consumer.html#comment-12504 Anonymous Mon, 04 Aug 2008 16:17:00 +0000 http://www.nakedcapitalism.com/2008/08/pity-the-us-consumer/#comment-12504 The point of civil society being at risk is this: Those toxic mortgages were leveraged (up to 30 times) and sold worldwide thus infecting global financial markets. Thus even small fluctuations,downward, have a huge impact. Look at the bank failures.<br/>As the housing catastrophe continues to rip apart the US economy, so the rest of the world will follow. We have already seen food riots and hoarding in poor countries (even in the US). That kind of behavior will spread as the financial situation worsens. Had leveraging not occurred, then letting the market take its course would be the right prescription. But because of leveraging the entire global financial system is at risk. <br/>When the US middle class gets desperate enough they might try to take matters into their own hands. I recently view a youtube video where in the author stated "Why don't we just get our guns and kill these people" meaning the Fed, bankers etc. (sendarope.com) I doubt that there will be a serious attempt at violent revolution in the US (remember the Weather Under Ground in the 1960's anyone? Communism in the 1930's).... But it could be get "less civil". The point of civil society being at risk is this: Those toxic mortgages were leveraged (up to 30 times) and sold worldwide thus infecting global financial markets. Thus even small fluctuations,downward, have a huge impact. Look at the bank failures.
As the housing catastrophe continues to rip apart the US economy, so the rest of the world will follow. We have already seen food riots and hoarding in poor countries (even in the US). That kind of behavior will spread as the financial situation worsens. Had leveraging not occurred, then letting the market take its course would be the right prescription. But because of leveraging the entire global financial system is at risk.
When the US middle class gets desperate enough they might try to take matters into their own hands. I recently view a youtube video where in the author stated “Why don’t we just get our guns and kill these people” meaning the Fed, bankers etc. (sendarope.com) I doubt that there will be a serious attempt at violent revolution in the US (remember the Weather Under Ground in the 1960’s anyone? Communism in the 1930’s)…. But it could be get “less civil”.

]]> By: doc holiday http://www.nakedcapitalism.com/2008/08/pity-us-consumer.html#comment-12503 doc holiday Mon, 04 Aug 2008 15:56:00 +0000 http://www.nakedcapitalism.com/2008/08/pity-the-us-consumer/#comment-12503 I guess I see Toto as a blogger I guess I see Toto as a blogger

]]> By: doc holiday http://www.nakedcapitalism.com/2008/08/pity-us-consumer.html#comment-12502 doc holiday Mon, 04 Aug 2008 15:55:00 +0000 http://www.nakedcapitalism.com/2008/08/pity-the-us-consumer/#comment-12502 Toto plays a key role in The Wizard of Oz. L. Frank Baum emphasizes the dreariness of Dorothy's life in Kansas and describes Toto as the only thing that brings her joy. Toto is the focus of the conflict between Dorothy and Miss Gulch and the reason Dorothy is caught in the storm that takes her to Oz. In Oz, Toto is the one who reveals the Wizard of Oz to be a fraud, but he also causes Dorothy to miss her return balloon flight. Given the prominent role Toto plays in the story, it is surprising that Henry Littlefield does not include Toto in his analysis of the parallels between the Populist movement and The Wonderful Wizard of Oz. Littlefield makes only one passing reference to Dorothy's dog in his article "The Wizard of Oz: Parable on Populism"..........>>><br/><br/>http://www.turnmeondeadman.net/OZ/Toto.php Toto plays a key role in The Wizard of Oz. L. Frank Baum emphasizes the dreariness of Dorothy's life in Kansas and describes Toto as the only thing that brings her joy. Toto is the focus of the conflict between Dorothy and Miss Gulch and the reason Dorothy is caught in the storm that takes her to Oz. In Oz, Toto is the one who reveals the Wizard of Oz to be a fraud, but he also causes Dorothy to miss her return balloon flight. Given the prominent role Toto plays in the story, it is surprising that Henry Littlefield does not include Toto in his analysis of the parallels between the Populist movement and The Wonderful Wizard of Oz. Littlefield makes only one passing reference to Dorothy's dog in his article "The Wizard of Oz: Parable on Populism"……….>>>

http://www.turnmeondeadman.net/OZ/Toto.php

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