One Third of Americans One Paycheck Away From Homelessness

This stunning factoid was reported in DS News last week and appears not to have gotten the attention it deserves. A mid-September survey ascertained that a full one third of Americans were living paycheck to paycheck, and if they lost their job, they would not be able to make their next rent or mortgage payment. And the article stresses this was not a function of being in or near the poverty line (hat tip reader May S):

Despite being more affluent, the poll found that even those with higher annual household incomes indicate they are not guaranteed to make their next housing payment if they lost their source of income.

Ten percent of survey respondents earning $100K or more a year say they would immediately miss a payment….

Sixty-one percent of those surveyed said if they were handed a pink slip, they would not be able to continue to make their mortgage or rent payment longer than five months.

The implications are grim. The odds of an economic recovery any time soon are close to non-existent. Many large companies (like Bank of America) have announced layoffs. Flagging top lines and a likely to be weak Christmas season, if Chinese shipping volumes are any guide, means more cuts are likely go be announced next year. And that’s before you factor in the impact of a strengthening dollar, state and local government belt tightening and a possible financial crisis.

With so many citizens on a knife’s edge financially, a slackening of demand will have a more severe impact than usual. I strongly suspect that most macroeconomic models don’t allow for the shock of job losses leading so quickly to the loss of the primary residence or extremely rapid curtailment of spending (as regular readers once know, once a homeowner misses a mortgage payment or two, pyramiding late fees pretty much assure they are on a path to foreclosure). In other words, if we have another economic leg down, it will feed on itself in a more pernicious manner than most experts foresee.

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  1. Typing Monkey

    With so many citizens on a knife’s edge financially, a slackening of demand will have a more severe impact than usual.

    Walk me through this, please. Where am I wrong?

    1. A lot of people default and declare BK. Houses get foreclosed.
    2. Banks sell them off at pennies on the dollar due to lack of buyers and therefore go belly up in the process.
    3. People buy back new homes at pennies on the dollar and get to live debt free.
    4. Medical expenses collapse as citizens finally decide not to support existing extortion racket.
    5. Citizens shift to the left (probably way too far to the left) since they finally get some empathy for the lower/middle class, forcing both parties to shift left as well.

    So basically, if your scenario occurs, there’s a year or so of hell and then most people who post on these boards get what they were hoping for, no? Am I missing something?

    1. ScottB

      If history is any guide, the result will not be a shift to the left, but rather a shift to the (fascist) right. Ninety years ago leftists who cheered when things went bad ended up hung from a tree.

      1. Typing Monkey

        You could be right, but this is a much older population, and more people hate the banks than hate foreigners right now, I think.

        The Left promises to cater t their wishes. Fascism doesn’t have much to offer the general population at the moment (especially an increasingly homeless population with huge medical bills).

        1. mux

          Don’t forget: in Nazi Germany one of the bigger reasons the jews were being eschewed and prosecuted was the fact that they ‘were’ the bankers. People had just come out of a very similar market crash. It’s really, really similar. Only this time, there is less focus on one particular and tangible demography being the evil guy that should be exterminated to ‘make everything better’.

          1. aet

            ‘Really similar”? To Germany of the 1920s-1930s?

            So what’s the present-day analogue of the occupation of the Ruhr by the French Army in the post-WW 1 period? Or the German leftist/worker response to that?

            ….not to mention the effects which that particular downing of tools had on the goal of the occupying French, and thus the larger economy – what’s the present-day analogue to that?

            And what is the present-day analogue to the reparations which Germany was forced, under military occupation, to pay, in the run-up to the late 1920s and early 1930s?

            “Really similar”…to those with highly selective vision, or the blind, perhaps.

            But it isn’t, not really.

          2. aet

            ..and let us not forget that German (and not only German, either) “big business” supported Herr Hitler’s policies, to the max.

            And what, besides anti-semitism, were those other economic policies, precisely?

            Please enlighten us!

          3. Jim Haygood

            ‘What’s the present-day analogue of the occupation of the Ruhr by the French Army in the post-WW 1 period?’ — aet

            That’s easy! It would be the EU/IMF financial repression of Greece, imposing hair-shirt austerity to MAKE THEM PAY.

            Instead of ‘Le Boche paiera!‘ this time round it’s ‘Les Grecs paieront!

            In both cases, the hard-headed bankster obsession with squeezing blood from a turnip is just ‘not on.’

            If ol’ Maynard Keynes wuz still around, he could write hisself a new book:

            The Economic Consequences of ‘Private Sector Involvement’

            TO BE CONTINUED …

          4. Peter T

            As many posters have already pointed out, the comparison to Nazi-Germany is not very good, as usual. Of course, there are some similarities, as probably in many economic downterms that take a long time.

            Hitler and his party got a lot of support by people and business due to fear: the fear of communism was very strong in 1932 and voters looked for the strongest response that they could find. The established democratic structures had lost their use by 1932, the land was governed by executive order. Will fear become strong enough again?

          5. Damian

            if you go to Dachau near Munich – short train ride – inside the camp there is an extensive display that tracks many socio-economic forces that contributed to the rise of fascism

            “one” of the tracks is related to retail markets – over the course of the 1920’s there was a huge consolidation in control of the markets – for example – department stores came into use and squeezed out thousands of the small retailers – this happened in many markets such that the jobs were lost and the Jews consolidated this new business approach to retail – this was one of the reasons they focused back to the jews as part of their economic plight – the jews hired their own for these giant combines and excluded gentiles.

            this happened all over germany – it is all public and posted in the administrative buildings just to the left of the entrance to the Dachau compound –

            question is do you buy this as real or an excuse posted by the germans?

            the analogy today is the LBO’s since 1977 (KKR inception) have consolidated the ownership to ten major groups of private equity houses controlled by the same people as in germany 80 years ago – then to pay for those LBO’s (increase the margin) with USA brands – they shipped to factories offshore for labor – no way for usa labor to compete “ever” – those brands are now imports with a fraction of the original labor cost – same exclusion as in germany

            the circle was GATT treaties that allowed this far eastern markets to usa without any advantages to USA except the promise of an offset of exported goods with usa labor to offset the loss of those jobs shipped offshore – it was never possible to make the jobs up with exports – except commodities (grain etc) – total fabrication

            the second phase is now in process which is destruction of the usa service jobs – as the consumers shrink the services they buy – that sector will go down and the jobs eliminated – the spiral down will be catastrophic

            There was a BILLIONAIR­­­E who said all of this in 1994.he was a “corporate raider” who understood the margins in this devils trade and the effect on society. Take a LBO and pay for it with a brand shipped overseas for manufactur­­­e – he laid it all out in a series in 1994



            The Germans today have shown that the key to an industrial policy for their country is a combinatio­­­n with societal goals and policies.

            GATT must be overturned – the reason the politician­­­s put it thru – republican­­­s and democrats – were payoffs by corporatio­­­ns. Everyone knew that labor rates in China / Cambodia were $250 per month! The promote for passage of the treaty was exports would substantia­­­lly increase but their “real” objective was to get into the USA consumer market with better margins on recognized Brands with foreign labor content for IMPORTS into USA by shedding US jobs with “free” entry into the largest consumer market in the world. Access given away for “free”-the transfer prices are all manipulate­­­d.

            The country needs a VAT and Tariffs that DISCRIMINA­­­TE against imports essentiall­­­y two tier rate and take the higher cost of US made goods as a cost of maintainin­­­g a “balanced” society – like the Germans!

            Sure there is retaliatio­­­n from other countries but we have that already from china with currency manipulati­­­on and other tools and exports are not enough to sustain long term full employment­­­.

        2. polly sigh

          You might want to brush up on what fascism actually is…it sort of appears as though Obama is a fascist by the very description of the term. Even though early forms of this tended to flow to the right, political parties don’t hold the same ideals now as they did back in the 20’s.

      2. JC

        It is the Fascist left not right. Both socialists and fascists take away freedoms which is a function of the left. They just use different methods. The right is about freedom and if you move to far to the right you have anarchy.

    2. tawal

      1. You have to have some money in order to file for bankruptcy, at least $1,000.
      2. Banks sell them for at least $0.50 on the dollar.
      3. People who exit bankruptcy are not eligible for home loans.
      4. If you don’t pay for government mandated health care you will be fined and liened.
      5. If you don’t pay the fine and lien, you go to jail.

    3. Middle Seaman

      Your comment uses Republican reality; you aren’t even close to what really happens.

      Most home owners in trouble don’t default; they just don’t have the money to pay mortgage. Foreclosed properties are selling below market value but not for pennies. Many foreclosed properties are vacant. Unemployed or employed with no health benefits, never paid for health insurance; otherwise nothing else is happening so far.

      Many of the poor and unemployed have more pressing issues than voting; they tend not to vote. Left, right or whatever does belong here.

    4. Mark P.

      Typing Monkey wrote: ‘basically, if (this) scenario occurs, there’s a year or so of hell and then most people who post on these boards get what they were hoping for, no? Am I missing something?’


      [1] In the real world, what we’re contemplating is a global game of musical chairs — the biggest such game in history, arguably — as everybody from top to bottom fights bitterly to keep hold of whatever assets they may imagine they still possess while they see others around them stripped.

      [2] Ultimately, nonetheless, a very large number people, communities and organizations — from sovereign nations and the TBTFs down to folks on your corner — will be so stripped. Some substantial number of people will die as a result.

      [3] While this happens, ‘black swan’ events — people will call them that — will continually occur as it’s discovered that this or that large institution has been covering up massive dysfunction and insolvency. We’ll become very used to news of a ‘new Greece,’ a ‘new Lehman Brothers,’ or a ‘new Vallejo’ emerging on a monthly, weekly or daily basis. Because of the global practice of ‘extend and pretend,’ the truth in these cases will frequently turn out to be worse than initially reported.

      [4] This process has begun already.

      For one instance: BoA currently doesn’t just have a website that doesn’t work, but various departments have been unable to communicate internally with each other for the last week.

      For another: California’s court and penal system has quietly run out of money, so state prisons will in a month or so be sending all but the most serious offenders back to the county jails, where the county sentencing system — even more resource-starved than the state — simply plans to turn the majority of new offenders free with putative ‘electronic monitoring’ — ankle bracelets with radios — that county enforcement has no resources to follow up on.

      [6] In short, rather than a smooth mechanical process — ‘a year or so of hell,’ as you suggest — the reality will be a decade of massive global deleveraging, in which a thin facade of social ‘normality’ will inadequately cover the anarchical reality.

      1. Mark P.

        Sorry. I should have reviewed my post. I had another instance of dysfunction for [5], but then thought it best to cut it.

          1. JasonRines

            Brilliant analysis Mark P. and far better form than my blunt commentary style about becoming Russia. The society vaporizes around us with no plan B’s. I have sarcasticslly joked here before about how I look forward to becoming a local warlord.

            China. I expect war in the Korean Pen. in 2015. China will be American allies though by the end WW3. Enough grimness! 2021 we will have much rebuilding to do but it will be a high time for man like no other. Until then, be prepared to step into situations to demonstrate leadership.

      2. bluntobj

        Mark P hits the nail on the head. No violent revolutions or grand changes, just slow devolution.

        This idea is best expressed by Charles Hughe Smith, a blogger found at His books are worth a read, especially Survival+, which speaks directly to this topic of devolution, and the uselessness of the “survival” mentality of the “splendid isolationist.”

        The devolution will really begin to kick in as greater numbers simply stop following government directives, opting out of the debt hamster wheel, stop paying the fees, licenses, permits, taxes, etc. We will see a fine example of how toothless government is as Greece’s tax revenues crash.

        It also begs a question: If progressivism’s best works rely on the exponential increase of tax revenue to the government for redistribution to those who have greater need, what occurs when that increase reverses, and becomes an exponential decline? Who must be jettisoned? How do you determine who loses or reduces their shares of the ever shrinking pie?

        1. Mark P.

          Eh. Not so fast.

          Personally, I’m no doomer, though permanent devolution and collapse of the larger U.S. society is definitely one scenario.

          More likely, though, are the mixed scenarios. I wrote “a thin facade of social ‘normality’ will inadequately cover the anarchical reality” and that “thin facade” component should be stressed.

          People will struggle to construct/continue a workable normality, in other words, as currently dysfunctional institutions collapse or are transformed. Meanwhile, new technologies will probably continue rolling out from Apple, Amazon and Google and such; simultaneously, SpaceX will likely get its commercial orbital launch act together. Biogenetic technologies will also have their social impacts; people really don’t appreciate how fast and cheap that stuff is getting.

          And not all existing American establishment institutions are dysfunctional. As we saw after Katrina, the U.S. military still has its act together — so far, anyway. For better or worse, we may see the military more frequently deployed on American soil in the coming decade.

          Devolution as in a trend for more regional forms of governance that are state or even city-centered — along the lines of the Italian city-states of the Renaissance — are also possible and even quite desirable.

          At any rate, we will be living — and dying — in interesting times.

        2. reslez

          [P]rogressivism’s best works rely on the exponential increase of tax revenue to the government for redistribution to those who have greater need

          If the economy is growing in line with tax revenue then it isn’t a problem, is it?

          And if the economy is decreasing in size, then we have bigger problems than worrying about “redistribution”.

          Average people in the U.S. are increasingly concerned about basic survival. And they’re growing deaf to the 1% whining about how much of their loot is skimmed off by government.

        3. Zhu Bajie

          Well,as public health measures are defunded, expect a lot of 3rd world diseases to come back. Typhus, typhoid, cholera, malaria, yellow fever, etc., might lower population quite a bit.

          1. JasonRines

            Good point Zhu. North America has different illnesses but both populations have ageing populations. Rationing of medicine and energy will indeed take its toll on the elderly. Families, business cosolidations, doubling up and closer quarters may mean less sanitation and illness.

    5. Lidia17

      You are wrong in that a person who just got foreclosed on his $300k house is not going to be able, for various reasons, to turn around and get a mortgage on a $150k house, whether that house is physically similar to the one he just left or not.

      Did you not understand the figures cited? 61% say they don’t have more than 5 months’ housing costs covered. That barely translates into moving costs and a security deposit+1st+last month’s rent, far from being a down payment to purchase something.

      I would think, too, that exacerbating the scenario Yves lays out is the just-in-time nature of—not just employment, but—consumer supply. There is no leeway any longer, no resiliency, in production and distribution so I can imagine that it would take a relatively small deviation from projections to create big problems.

      1. aet

        You oughtn’t to buy a home unless you can pay at least 20% of the cost in cash on closing, without borrowing it.

        1. LifelongLib

          I don’t agree that being able to make a large down-payment indicates an ability to pay a mortgage. You could have lived at your parents’ home rent-free to save the money. Having been able to pay rent for a number of years is a much better indicator. Where I live at least rents are actually more expensive than mortgages + maintenance fees.

          1. JTFaraday

            Yeah, because the past is definitely predictive of the future when it comes to employment security.

            Hence, the title of the post–“One Third of Americans One Paycheck Away From Homelessness.”

    6. F. Beard

      there’s a year or so of hell TM

      Stop right there. Why should the victims of the government enforced counterfeiting cartel, our banking system, suffer “hell”? It is ONLY money that is required and money is mostly just electronic bookkeeping entries. And if nearly everyone is suffering then is it not obvious that the system itself has failed? And if the system has failed then why do you advocate proceeding as if it hadn’t failed?

      Am I missing something? TM


    7. PL

      Typing Monkey,
      Sorry Typing Monkey but your predictions are incorrect for so many reasons:

      “A lot of people default and declare BK. Houses get foreclosed.”

      *Bankruptcy legal fees which commonly begin at $2500 are unaffordable for many people in financial distress. Instead, they get foreclosed without debt being discharged, their credit is ruined and deficiency judgments have the potential to wipe out any gains made as people regain their financial footing.*

      “Banks sell them off at pennies on the dollar due to lack of buyers and therefore go belly up in the process.”

      *Incorrect in my experience. Loss Mitigation employees will cut off their noses in spite of their faces rather than negotiate on price. They operate semi-independently and must have perverse incentives. They insist on receiving market value, as they define it, and are willing to pay for phony inflated BPO’s to support their delusions (which they call appraisals). They are NOT selling properties for pennies on the dollar, rather they will allow properties to sit on the market for years hoping it will get the price their delusions say it’s worth.*

      “People buy back new homes at pennies on the dollar and get to live debt free.”

      *No, people with ruined credit cannot get loans to buy back homes at any price. They also cannot get landlords who run credit checks to lease to them. They do NOT live debt free because zombie debt collectors waiving deficiency judgments hound them hoping to make more money off them. It is notable that some buyers of foreclosed properties have been banks picking up rental properties–some of the same companies who created the financial crisis and will profit again from the same hapless regular folks.*

      “Medical expenses collapse as citizens finally decide not to support existing extortion racket.”

      *It is not an option for many people to take a stand against the existing medical system. Ask anyone with a chronic condition, there is no way to walk away from treatment and meds unless one has a death wish.*

    8. Heron

      Points 2 and 3 are incorrect. Remember, these people won’t have jobs, the banks will be holding on to the property primarily as a store of value, just like they are with hoarded cash, and banks are very leery of non-institutional lending right now. Even if the economy weren’t terrible in every other sector, the banks designed these mortgages to default easily because they wanted to get the real estate cheaply so they could profit from its “real”(i.e., bubble inflated) value, so they’d want to hold on to it and wait for a market recovery before selling, anyway.

      So, the banks won’t put the houses on the market very soon, the old owners won’t be able to get a loan to buy them back, and because they ate through their savings while waiting for the price adjustment because they couldn’t find a job, they won’t be able to buy it back on their own, either.

      Point 4 is also problematic. The price for medical care isn’t determined by demand in the US, but by the insurance, drug, and medical device industries through what they charge doctors and hospitals. US citizens were willing to pay those inflated prices because the “rational, maximizing consumer” and “100% free market” are complete fictions; you can’t really shop around medical care outside of the major cities (NY, LA, and maybe Chicago), and most consumers would rather pay more at the provider they go to first than ferret over all the other sellers of a good or service to find the best price. As a result, the MDID industries can pretty much set whatever price they want, and it doesn’t really matter that doing so pushes many customers out because 1) laws guaranteeing emergency room care covered by tax payers effectively subsidizes the most expensive procedures, and 2) people who can’t pay insurance fees aren’t part of their market in the first place.

      As to point 5, even that isn’t a given, though I disagree that a shift to fascism is the more likely result. The people will shift their political allegiance to whichever political persuasion presents a compelling plan for recovery, carries it out, and presides over economic improvement as a result. During the Prohibition/Depression Era, that was the Democrats, who capitalized on their protest vote victories under the Hoover Admin by hammering on the failures of post Civil War Republican policies, and quickly effected noticeable improvements after the election of FDR. That, combined with his leadership during WWII and the penetration of state/local politics by the Progressive social reform alliance is why the Democratic party was so omnipotent electorally until after the Civil Rights movement, not solely Hoover’s failures.

    9. chris

      Cause and effect gets interrupted by the inability to foreclose. Your scenario sounds plausible for 1930’s America where fascism was seen as a solution (Father Coughlin and Prescott Walker Bush). Outright stupidity of the elites/bankers has been derailing their foreclosure On America plan this time around.

    10. Jeff

      You skipped a step.

      Fanny and Freddy sell millions
      of taxpayer owned homes to billionaire vulture
      investors who then rent out the homes at market rates
      to the taxpayers.

      1. PL

        You are correct–Fannie and Freddie sell to billionaire vulture investors.

        Another step I left out: the same foreclosure mill law firm that obtains the foreclosure judgment and carries it through Sheriff’s sale, plays a role in REO sale of the property. The law firm’s captive title company sells the title insurance policy, containing many exclusions, on the REO sale. Since these slimey lawyers work for pennies obtaining the foreclosure per LPS contracts, they make up lost profit margin with title insurance (during foreclosure and on the REO sale.) So many vultures.

    11. Tom g

      1-4 are a bulls eye but 5 is dead wrong.

      No one will shift left because people are now playing with their own money, as they should. When things become cheaper we don’t need to have empathy for the middle class. We don’t need to invent all this trite bullshit to help the middle class survive. They’re now surviving on their own in a sustainable way.

      1. PL

        What on earth are you talking about? Have you been reading Any Rand again?? There will never be time when empathy is unnecessary. A level playing field is not “trite bullshit” it’s absolutely necessary for a healthy political and economic system. *It’s the system we have now that is unsustainable.*

    12. JasonRines

      What your missing is why two generations get to prosper and one ia destroyed. Also, thinking lifes great to USA becoming Russia near overnight is a bit frazzling on the mind don’t you think? We’re going to have lots of mentally ill people heading into all classes of communities committing violent crimes. Sounds delightful. If the population had any savings sure pennies for assets is fine. Unfortunately, the ruthless and scandalous can afford those cheap assets.

      You are too bright to be so coy here. Lets talk about the advantages and disadvantages of the CB model.

    13. latitude38

      replying to scotty b comment about a shift to the right (fascism) nothing could be further from the truth as my friend john j. ray correctly points out;
      The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin’s Communism. The very word “Nazi” is a German abbreviation for “National Socialist” (Nationalsozialist) and the full name of Hitler’s political party (translated) was “The National Socialist German Workers’ Party” (In German: Nationalsozialistische Deutsche Arbeiterpartei

      1. anon

        That’s wrong. Nazism is generally considered a form of right-wing socialism. For an overview, see the following well-referenced Wikipedia article:

        “The term “socialism” has been used by right-wing movements and politicians to describe their support for social solidarity and paternalism as opposed to what they see as anti-social individualism and commercialism. This has been termed as right-wing socialism. It supports social hierarchy and allows certain people or groups to have privileges in society. Military socialism, guild socialism, and agrarian socialism are related to right-wing socialism. Bismarckism and later fascism and Nazism have been considered examples of right-wing socialism.”

        So, no, it wasn’t Randian individualism. But that does not make it “left-wing,” which “generally refer[s] to support for an egalitarian society.” See:

    14. Keep Typing

      Surely, somewhere in the library of Babel we will find a Shakespeare Sonnet. Just keep typing.

      Seriously, though, two words: narrative fallacy. You don’t need BK for foreclosure. You can’t buy housing for pennies on the dollar in this universe. And don’t forget: hell is other people at breakfast (with apologies to Sartre). Not the experience we are living through, which appears to be of a different order of magnitude.

    1. Mark P.


      Factoid – insignificant or trivial fact.

      2. something fictitious or unsubstantiated that is presented as fact, devised especially to gain publicity and accepted because of constant repetition.

    2. Skippy

      Every time someone uses the “god kills” in a sentence, Santa Claus gets a bowel obstruction.

      Skippy…I believe in CDS spreads are a definitive metric to a company’s long term viability, I believe, I believe[!], damn I still killed it…sigh…the credit unworthy must perish.

        1. Piano Racer

          Oh come on, I bet we can do better than that! Every time [x], :

          * Linda Green robosigns another invalid foreclosure affidavit
          * Tom Miller goes down on a banker
          * William K. Black pens a scathing op-ed


  2. R Foreman

    Any little disruption in demand which might cause a layoff, and the Fed-Treasury money funnel evaporates, money creation goes into reverse, and the deflationary death spiral begins… interesting… they might have to decrease the size of government or something, maybe close a few foreign military bases, mothball a few aircraft carriers and such.

    1. aet

      Wasn’t the last American deflation in the early 1950s…brought on by the partial de-mobilisation of the Armed Forces America had assembled to fight WW 2?

      Wasn’t that de-mobilization halted by the Cold War?

      What was it Ike was on about, when he stated that the choice was….guns or butter?

      I don’t know…. I get the feeling that the whole world really ought to be quite a bit wealthier, quite a bit better off, than it presently is.

      OTOH, the present gloom may only be a “media artifact”, or partly so….people do tend to let their imaginations run away with them, sometimes, and there’s quite a bit of “self-definition” going on in that “media quarter” at all times, it seems… other words, we all may be quite a bit wealthier than we appreciate, or perhaps have been led to believe.
      Some things considered or called ‘unaffordable”, may in fact be readily affordable; may even be cheaper than present arrangements… more efficient, that is, at achieving the stated goals, the pursuit of which has
      resulted in the adoption of those arrangements in the first place.

      There may be ways of doing things that would work better.

      Gee, that last sentence seems, upon reflection, to be almost a truism.

      Of course people can do better!

      1. R Foreman

        Which came first, demand destruction or the deflation ? Doesn’t really matter because once it starts, the one causes the other, until equilibrium is reached. Write off the bad debt, suffer the deflation, and we get closer to equilibrium than we were before.

  3. salvo

    whatever it may be, the absolute power referred to the significant ‘god’ should primarily get rid of all those psychopaths misusing it

  4. Nat

    Sensationalist headline.

    Most people faced with no income, will stop paying for something less important first. Food and shelter still are the primary importance. And if 1/3 of citizens are really faced with imminent homelessness, foreclosure has to be suspended. Its action is just a breach of contract and no body is going to die from simple agreement written on piece of paper. What is the value of such law if people are about to die from it?

    1. bmeisen

      Interesting but also a little suspicious as the report effectively promotes the interests of the REO industry, a force behind DS News.

      Hey look at the potential for growth in REO market! A third of all Americans could be out on the street. That would be about 25 million houses. If the economy continues to stall let’s guess that half of those houses – 13 million? – are going into the REO market and that means a big payday for anyone who gets in at the start. Those already in cash out first.

      And it should be noted that the fear of homelessness, the understanding that it could happen to you, is well integrated into American culture, regardless of the real probability. For many if not most residents in European social democracies the fear of homelessness does not exist, the idea is bizarre. Homelessness exists here and there are appalling cases that sometimes get into the paper. But the fear of homelessness does not lurk in the public imagination the way it does in the USA.

      1. Lidia17

        exactly. Conceiveably, just as pissing wealth down the rathole of war increases GDP, the expense of all these foreclosures will create a mini-wave of destructive transactions that will be taken for an economic “stimulus”.

        Think of all the new jobs doing trash-outs! The pool cleaners and electricians and appliance installers who’ve been cleaning up after the mess in many cases.

        Tha fact that it costs more overall to deal with homes that are abandoned than actually keeping people IN the homes is going to be measured, somewhere, as “a good thing”! Such are the distortions of our monetary system and the bone-headed “economists” who pretend to study it.

        1. F. Beard

          Tha fact that it costs more overall to deal with homes that are abandoned than actually keeping people IN the homes is going to be measured, somewhere, as “a good thing”! Lidia17

          Indeed! And people HATE doing needless work even if they are well paid for it.

    2. Heron

      Your objection is based on the mistaken impression that the law exists to promote the general weal. It doesn’t. These laws exists to protect the investments of capitalists. In more direct terms, they exists to make sure loans fail quickly, and that every last bit of payment possible is extracted from debtors, preferably through a life-long debt-peonage-like system of wage garnishment.

      1. Heron

        Let me explain why long-term wage-garnishment over a lifetime is preferred, for the sake of clarity. A lump sum payment is a windfall; consistent monthly payments are a revenue source. Like any other revenue source ( credit card debt, mortgage payments, rents, any sort of amortization scheme) they can be leveraged now against the full future potential value of the debt contract. New investments can be drawn in through new financial instruments, new financial instruments are made from debt, debt is the currency of the global economy, and life-long wage-garnishment is, in effect, a 60-year-long debt contract guaranteed, enforced, and backstopped by the state. A wage-garnishment on your balance-sheet can make much more money for you that a lump sum generated through a fire-sale can.

        Coincidentally, the predisposition of financial institutions to favor long-term, inescapable indebtedness, is why we have bankruptcy for corporations. Long-term debt payments would cripple the business, limiting its growth, profit potential, and ability to drawn in new capital. Bankruptcy, in effect, allows the business to pay that debt (after hair-cutting it) with a large, lump sum generated by selling off capital and stock. Bankruptcy was designed to protect against debt-slavery. Why is should be restricted to corporations and the well-to-do is a mystery to me.

        1. Nat

          Strong Legal-ist type of domain was already experimented in far east a long long time ago. That domain lasted less than a generation because the rule of law was used to entrap common people and not for general welfare, like what we have in the America today. It will not last.

  5. jake chase

    Things are not good. Unemployment is high. Lots of mortgages are under water. People are cutting back discretionary spending. Probably, the world is not going to end. I have been buying stocks are will keep buying them. At age 68 I have seen all this before. It will not be very long now before the money spigots open up to create a new class of federal beneficiaries. You can count on it.

    Civilized life cannot go on for more than a few days without millions of ordinary people one or two paychecks away from starvation getting up every morning and humping off to a dead end job. That is why they call it work. The idea is to escape having to do it. That takes intelligence, discipline, luck. Not everyone can do it. Too many people who have managed to escape work use their opportunity to sit around constructing scenarios in which financial life comes to an end. Some of you should ask yourselves if it makes sense to be doing that.

    1. Susan the other

      So you think it was all, or partly, a choreographed crash? And they lost control of it somewhere along the way. Maybe c. 2007 when Hank Paulsen went to Europe to solidify financial ties and reassured Sarkozy and Lagarde that everything would be fine in the securitized bond industry but that it would just take a few months for everything to be re-priced. What was he thinking? That he and all the financial wizards could just open up the floodgates, fraud and all, with a massive bubble of derivatives causing a fatal paralysis of the system. What system? If Hank doesn’t understand it, none of the bankers understand what the system is. I think it is safe to say the banks are totally panicked. Am I the only one who has recently noticed the OCC following up on last spring’s consent letters to the effect that there will now be an investigation of at least 4.5 possibly illegal foreclosures. The OCC mind you. Those trembling twits who send out all those sanitized press releases. I don’t think criminal prosecutions, or the threat of criminal prosecutions, should be conflated with an out of court solution and the restitution then referred to as a new class of federal beneficiaries.

        1. Mark P.

          Yeah. And it’s not just the OCC. Yves comments in Wednesday’s links that the mortgage-securitization/foreclosure litigation against the TBTFs is now hitting thick and fast, so she’s struggling to keep up with it.

          2012 is going to be one of those “interesting” years in American history.

    1. Glen

      On second thought, serfs had feudal lords that MIGHT have felt responsible to provide for people in their care. I’m not sure we have that since our government seems bound and determined to enact “austerity”.

      Not sure where that leaves people but I guess this is what society looks like when we all work at WalMart and nobody can even afford to shop there.

      1. Mel

        The Irish Potato Famine would give us the model of things getting really ugly. Alienated ownership can make very nasty choices.

  6. FatCat!

    Serves them right!… mother fuc*ers!

    When I lobbied Bush to attack Iraq so I could sell more of MY bombs, they cheered “USA! USA! USA!”

    When MY Blackwater started killing and torturing women and children they cheered “USA! USA! USA!”

    When MY DoD built MY Gitmo with MY contractors, they cheered “USA! USA! USA!”

    When I stole their 2000 and 2004 presidential elections they cheered “USA! USA! USA!”

    When I bribed MY Supreme Court to pass MY Citizens United they cheered “USA! USA! USA!”

    When I set up MY Tea Party they flocked gun in hand and cheered “USA! USA! USA!”

    When MY Congress passed MY bailout packages they cheered “USA! USA! USA!”

    When I stripped Obamacare of the public option, they cheered “USA! USA! USA!”

    When I started dismantling whatever was left of THEIR unions, they cheered “USA! USA! USA!”

    When I got my robosigners to steal their neighbor’s house they cheered “USA! USA! USA!”

    When I had MY State of Georgia murder Troy Davis, they cheered “USA! USA! USA!”

    When I had MY drones murder 2 American citizens last week, they cheered “USA! USA! USA!”

    When I bribed MY NYPD last week, they cheered “USA! USA! USA!”

    When I had 700 of THEM arrested last week, they cheered “USA! USA! USA!”

    There is a price to pay all that bad karma THEY are complicit with. What goes around comes around. It’s time to pay your dues… and it’ll be MY pleasure to extract payment…

    I hate to repeat myself, but, “Serves them right!… mother fuc*ers!”

    FatCat! (bow down and worship ME right now! Is that clear?!)

    1. Psychoanalystus

      I worship Thee, FatCat. Thou art worthy, my Lord.

      We have missed reading thine posts here lately, thy highness. Have thou been so busy privatizing Greece and other backwaters, as to not find the time to bestow thine wisdom upon us?

      Forsake us not, my Master, for we are thine bond-servants.

      Psychoanalystus (a nobody)

  7. rd

    Instead of “Hoovervilles”, I wonder what they will call them? So many possibilities!

    The financial sector is really not going to enjoy it when those additional homeless people move into the “Occupy Wall Street” encampments in various cities. It will just be more people on the sidewalk you have to get around without spilling your coffee.

    I do wonder how many of the financial sector rank-and-file will be joining those encampments afte they get laid off. Unfortunately, I have thought for several years that the financial sector head count would need to drop by a third or more before we can get back to a healthy, productive economy.

    The problem with financial crises is that they implode the rest of the economy as well, so there aren’t relatively easy transitions for them, unlike say the aftermath of the collapse. The financial crises also don’t leave a lot of overbuilt infrastructure, like railroads, fiber-optic lines, or houses to keep costs low for a long time. Instead, they require a lot of legislative effort to create Glass-Steagal acts and other things to prevent a recurrence. Unfortunately, despite the hype, Dodd-Frank is no Glass-Steagal.

    Ultimately, it was the vision of elderly without money unable to afford a place to live and going hungry in the early 30s that created Social Security. Social Security has been quite effective on eradicating the worst of that but still requires persoanl savings to live well in retirement. I assume that Granny starving in the street are the “good old days” that the Koch Brothers are yearning for.

  8. frobn

    Several years ago, with tongue in cheek, I speculated about a “20% solution” would take control of elections from lobbyists and give it back to the people. If 20% of the electorate voted for the ‘other guy’, the one not in office, regardless of party within 6 years the house of representatives would turn over 3 times, the senate and the presidency once. Money would not be able to buy an election and everyone who runs for an office would know they had one term to make a difference. With 1/3 of Americans one paycheck away from homelessness gives the 20% solution a large buffer.

  9. jaymaster

    Talk about defining homelessness down (or up, in this case).

    Although I do agree with the general sentiment of the post, such hyperbole doesn’t help anyone.

    Being behind on the rent or mortgage is a far cry from being homeless.

    1. Capo Regime

      So what is the appropriate tone to take when 1/3 of people are a paycheck away from homelessness? Or even 1/5? Where is the hyperbole actually–its pretty serious and should as article points out–be taken more seriously and its surprising like so many other facts that MSN gives it so little attention.

      So how are people best served? By denial? Counting their blessings and seeing what Gaga and beiber are up to? Nothing hyperbolic in article. Alarming and as such serves people well by waking them up and alert them to plight of their fellow citizens.

    2. Capo Regime

      Being behind on rent or mortgage is not a far cry from homelessness. Being behind on rent or mortgage pretty often is the first step on the road to homelessness. I do think there are now 1,000,000 million children (per HUD) homeless due to foreclosure eviction. So what planet do you live on where foreclousre and eviction are “a far cry” from homelessness? Work for B of A?

      1. aet

        What about the actual homeless? No thought for them? Only for the “potential” homeless?

        IMHO the actual homeless need help (and thus people’s concern) more than the “potentially” homeless do!

  10. ml johnstone

    the average American spends over $9000 per yr just on maintenance for 1 automobile
    the majority drive to work
    cut the auto habit and there is money to pay for other stuff
    Also, if 1/2 the drivers in the US quit driving 1 auto for 1 yr and that money was pooled, it would be over $ 3 TRILLION
    That could buy some necessary services,like better public transit

    1. DF

      That seems awfully high. I may only be spending at most a few hundred/year on maintenance. Is that including insurance, registration, and fuel?

      1. Jake

        If you only drive 12k a year you must be able to walk to work. It cost around $4k to get into the lease you mention. Your insurance cost a very low, you must live in Nebraska. Try Chicago. The average commute in Ca is around 50 miles a day, not a week.

    2. Yearning To Learn

      the average American spends over $9000 per yr just on maintenance for 1 automobile

      I’m originally from SF, and I hear that sort of quote a lot as well.

      it is clearly a gross overestimation, unless you mean total costs… and even then I’d be hard pressed to get that number.

      one of the most expensive ways to buy a car is to continually lease. So let’s start there

      Right now one can lease a 3 series BMW for $359/month. adding taxes/fees/etc it is $459/mo. add in insurance which would be maybe $150/month. Add in license tabs which is like $200/year.
      Maintenance is O. (BMW pays it all).
      Gas at 12k/year at $4/gallon and 20mpg is about $2400/year

      So that’s $9708/year. For all costs including insurance and tax and gas for a continually LEASED BMW.

      so no way that $9k/year is anywhere near the average. Long ago I bought a Toyota Tercel for $10,100 total price. I owned it for 11 years. I got about 44 miles per gallon, and I brought it in every 2-3 years for service, otherwise changed the oil myself.
      I only made $12,500 or so per year at the time. My total car costs were probably under $2-3k/year.

    3. Capo Regime

      “The average” Averages really don’t tell you that much and really not a good basis to start redistributionist policies as you suggest…..

      1. aet

        Yes – the median tells more of the truth than does the average.

        One person makes a million $$, and ten more people make ten dollars each – what’s the average income there? And what’s the median income?

        And which gives a more accurate picture of income distribution?

    1. Bill G

      Maybe people should live below their means and save money and then they wouldn’t have this problem. Sounds like a little homelessness might produce an important teachable moment?

      1. F. Beard

        Maybe people should live below their means and save money and then they wouldn’t have this problem Bill G

        The government enforced counterfeiting cartel precludes honest saving via negative real interest rates, particularly wrt housing. To not borrow from the cartel is to be priced out of the market by those do borrow.

        Sounds like a little homelessness might produce an important teachable moment? Bill G

        Indeed! May it start and end with those who don’t perceive the injustice of the current system.

      2. LeeAnne

        Maybe Bill G. should find another employer -who wouldn’t require him to defame decent people being slaughtered financially and by the gangster corporations who will get around to him soon enough.

      3. chris

        Maybe it was not the people living beyond their means. Maybe it was an immoral government captured by an oligarchical collective of the Right and Left which aggrandized to themselves the wealth of despots and tyrants.

          1. issacread

            Actually this is one aspect in which the “trickle down” theory works; fraud and corruption. It’s taken several decades to wrack and ruin but though “both” applies, there’s no mixing up the cart and horse. Monkey see monkey do. The institutional aspect cooks it.

      4. Lidia

        Bill G, as a retiree with no pension and no SS, I saw fit to accumulate a lot of “saved money” (cash, stocks, bonds), and you know what? Its value is all going into the toilet.

        The extractors have extracted all they can superficially extract, but they are still hungry—hungrier than ever—and they are not going to give up until we have all offered up our pounds of flesh.

        Their extraction mechanism is not only inhuman but incompatible with life on the planet.

  11. Little voice in texas

    I’m thinking of Bernadette Peters in the movie the jerk. ” I don’t mind losing all the money. I mind losing all the STUFF!

  12. LeeAnne

    come here to save us. the dictator’s wife worthy of the USA banana republic
    Michelle Obama’s taxpayer-funded spending is an embarrassment for the White House By Nile Gardiner

    Michelle Obama’s grand tour of southern Africa earlier this year cost American taxpayers nearly half a million dollars – and that’s just for the flights. This follows in the wake of claims this August from sources inside the White House itself that the First Lady may have spent “$10 million of taxpayers’ money on vacations alone in the past year.” Without all the figures available, it is impossible to establish the total cost ..

  13. Kevin Murphy

    Making more than 100k per year and no savings? I know it’s just an anecdotal observation but many people have been living beyond their means. A whole generation of children have been raised on MTV and it’s glorification of excess consumption.

    1. F. Beard

      … but many people have been living beyond their means. Kevin Murphy

      How is that even possible to any large extent? And as long as money was available then people worked and provided goods and services to each other. Now the money is gone and those goods and services should just disappear? Why?

      What if our money was not based on debt to 3rd parties and usury? Would we even have significant recessions and unemployment?

      1. chris

        Would we even have significant recessions and unemployment?

        Good question.

        Wouldn’t aspects of greed and avarice enter in and insure some one or some group trying to establish control over others?

        Even in medieval times of barter economies the nature of man worked against the betterment of the village.

        1. Joe Rebholz

          Human nature is not fixed. The amount and distribution of greed and averice depend on the culture. They are not fixed. If our present culture has too much greed, we can engineer a revolution to reduce it.

      2. Mel

        “And as long as money was available then people worked and provided goods and services to each other. Now the money is gone and those goods and services should just disappear? Why?”

        That is the thing. In theory, the market and the money that moves around in it are tools that society uses to decide whet to do first, and what next, and what to forget about. Now in practice the Euro-American market has decided just to take off and play poker. The results are correspondingly meaningless. Anybody who makes serious decisions based on those auguries is going to have trouble.

    2. LeeAnne

      Chris still trolling around up there. The strategy seems to be to nag people off the blog

      Yves, I’d do some fast reorganizing. Now is the time. I read your article with a lot of interest about blogs now targeted, now that TPTB feel really threatened by information broadcast by real people.

      I’m ready for the sacrifice were you ready to carefully select who comments on this blog.

      Reading NC has been a rich experience and I would continue reading it were I to comment or not.

      I really think its time for you to cut out comments altogether while NC is still rated at the top of economic blogs, to have only people commenting and arguing who you feel contribute to your posts and those of your guest posters -or some such new rating criteria of your own choosing.

      My thanks for all the good work you do.

      1. Neo-Realist

        There may be a bit of trolling going on round here, but I read enough interesting perspectives and ideas on this blog such that I believe that it would be potentially a great diservice to turn off the comments entirely.

      2. chris

        Sorry you think of yourself as that important since the question was not for directed at you.

        Please continue to think you are interesting.

      3. Susan the other

        I think our whole national enterprise is morphing. I also think the end result will actually be good. Because if it isn’t, it’ll be hell. I think our government knows this and their spying and astroturf tricks are going to circle them. For Naked Capitalism to back off would be unthinkable. Trolls or not, NC should go forward with all of the crazy-good articles and opinions followed by all the comments. The comments are encouraging because they are so overwhelmingly good. Let the spies get an earful. And when they comment give them another earful. And do not be afraid of them. It occurs to me that the people with the most to gain from spying are the corporations because they desperately need to know what they can sell us. Tail wag dog.

      4. Lidia

        On other blogs I frequent, they use Disqus, which offers a level of accreditation. Any reader can see whether the commenter has a history, and what that history is.

        I used to think it was creepy, and contrary to the spirit of anonymous contributions, but seeing as more powerful forces want to play dirty, I think there could be value in “knowing” one’s interlocutor and establishing trust among known (if anonymous) commenters.

        Just a thought.

        1. JTFaraday

          I hate Disqus. It’s buggy. I also like being able to say what I want to say without worrying about my “upvotes.”

          I never get hearts at the NY Times. :(

  14. Eugene

    Like the SNL skit says: “Don’t buy stuff you can’t afford.”

    I have no sympathy for folks who live beyond their means, don’t save for a rainy day and then whine because they are living paycheck to paycheck.

    1. chris

      Unless you buy/have bought everything with just your surplus earnings (in other words, no purchases on credit of any kind, at anytime, whatsoever) you have lived beyond your means.

      1. Eugene

        By your definition, which, by the way I do not accept.

        Having a $2800 house payment on $4000 a month take home is living beyond your means, particularly if your job is subject to furloughs and work stoppages and your monthly income varies greatly. Having a $650 a month house payment on $4000 a month take home is probably a lot closer to living within your means. Reliable cash flow for debt servicing has to be considered.

        1. F. Beard

          Sorry bud but if you borrowed from the banks then the purchasing power for that so-called “credit” came from the entire population including those you now heap scorn on.

          Virtually the entire population is forced by the system to be either victim or victimizer and most often to be both.

          1. F. Beard

            The bank does not get the money from everyone, it lends money based on it’s reserve ratio. Eugene

            Banks don’t actually lend existing money. Instead they create temporary money, so-called “credit”, and lend it for a promise to repay that credit (plus interest that does not even exist in aggregate) to the so-called “credit-worthy”. But all new money, even temporary money (Is 30 years “temporary”?) dilutes the purchasing power of existing money. Thus bank credit creation is a form of theft by inflation.

            The entire population has been tricked into stealing from each other for the benefit and profit of bankers.

          2. Tom g

            Ha Ha Ha at comment from Eugene, please get yourself a vasectomy or at least try to think more than a quarter move ahead. Reserve ratio, haha that’s rich. Must be happening in a vacuum then right?

          3. Eugene

            F. Beard, I am aware the banks lend money out of “thin air”. However, lending is technically tied to their reserve ratio. The problem has to do with what is the true value of the ratio and how should it really be measured? One of the reasons bank equities are so volatile at the moment is that no one trusts their reporting. You fall into the camp that believes lending creates inflation. I do not agree with that camp.

            Chris, I agree, the banks are marking everything to their advantage. They continue to value loans at unrealistic risk levels. FASB continues to manipulate accounting rules so banks don’t have to report their true exposure.

            Tom g, thank you for the not so pertinent comments. I think I shall be able to nominate you for a Darwin award in the near future.

          4. F. Beard

            You fall into the camp that believes lending creates inflation. I do not agree with that camp. Eugene

            Honest lending does not create inflation – money creation does. The moment new money is lent or spent into the economy, the value of all other same type money is diluted. It is morally irrelevant whether that new money is used to increase production and POSSIBLY lower prices. It is also morally irrelevant if that new money provides jobs for some of the population. The population’s purchasing power was stolen or at best borrowed WITHOUT permission. That is wrong!

            Money creation can be done ethically. Common stock, for example, is an ideal private money that “shares” the risks and rewards of new money creation. Nor does common stock require 3rd party borrowing or lending, much less fractional reserves or usury.

          5. Lidia

            Of COURSE your borrowing from a bank affects me, the cash-payer.

            The money banks invent out of thin air constantly dilutes my cash holdings, just as new corporate “offerings” continually dilute the value of equity shares.

            There’s an extraction mechanism in place: a sort of osmosis membrane, whereby the wealth is guaranteed to flow only one way.

        2. abprosper

          A quick lesson for the “moral hazard” crowd. The only way the current economy can be sustained and for us to have a high savings rate is for some things have to happen.

          #1 Wages must rise about 60% above inflation for the bottom 99%.

          This allows people to save about 1/3 of their income and to actually either have spending money or pay down debt. However understand that even if could happen, it will take nearly a decade of low unemployment to get the debts cleared.

          #2 Some other sucker must buy our surplus production which game theory and common sense says is impossible or we have to retool the economy to a closed loop where we produce much less with less hours at a much higher wage cost.

          Right now many nations depend on the US being a net importer to sustain their corporate profits and safety nets, either public (via the state) or private (via extreme savings rates) If we are not buying, their economy will go down, as does ours. The only way around that is forced work sharing, trade controls and border/immigration controls( to dry up labor) .

          The reason for all this regulation is that do to globalism and automation decent jobs are zero sum. Sure we can create $8 an hour jobs, so what?

          The US cannot be a rich nation with low wages

          Also counting on your now impoverished population to support you is false hope. Such a country will not be able to support suppression either and as we can see by the extreme fear over Occupy Wall Street is very brittle. That gets down to open your wallet or dig your grave.

    2. Susan the other

      So when you castigate those who live beyond their means – and since corporations are people too – are you including the corporations and the “banks”? And since their (corporations and banks) transgressions are so massive, should they suffer more than others? Should the 99% maintain a modest living standard, but the true culprits be relieved of all their possessions?

      1. Eugene

        I think most of the folks that made the types of decisions that brought on too much leverage with too little capital to cover should probably have been tried on various charges and hopefully sent to jail. I strongly agreed with Ritholtz that the Swedish solution might have worked for the U.S., been a lot cheaper and probably at least appeared to be equitable for those losing lots of money.

        However, that does not alleviate folks from taking responsibility for over extending themselves. It’s simply a fact of life that an engineer will make more than a janitor. The skill sets are completely different and there will always be income disparities based on skill level and need.

        1. F. Beard

          It’s simply a fact of life that an engineer will make more than a janitor. Eugene

          And that a banker will make much more than an engineer even thought the engineer is typically smarter and has had a much more difficult schooling?

    3. rps

      “People who don’t save for a rainy day?” Whew, ROFlMAO that’s right up there with “people who pull themselves up by the bootstraps.” Eugene, I’d like to introduce you to my dearest friend, Ms. Critical Thinking. Ms. Critical Thinking how is it that people choose not to save for a “rainy day?” Well, it’s not a choice Eugene, since its impossible to save when you are underpaid and your wages do not commensurate with daily living expenses. Once upon a time, wages were calculated by CPI. However CPI has been manipulated to obscure true inflation. Isnt’ that right Mr. Clinton and Mr. Greenspan? True enough Ms. Thinking, however people are more apt to blame their neighbors, then look for the true cause of their miseries.” Bill? “I feel your pain. What is, is.” Thanks boys, now back to your machinations of undermining humankind. So Eugene, raises were replaced with WMD’s;credit cards. Since the Chrysler bailout of 1979 under good ole southern boy president Jimmy Carter, unions have been horsewhipped and flogged into concessions by the demonization of the collective’s rights. The bandwagon parade to drag down UAW workers (rather than lift up all workers) was the media’s blaring horn. The decimation of workers wages was specifically designed to upstream profits. And the Gordon Gecko’s are handsomely rewarded and worshiped for stealing labor’s wealth with labor’s consent! All under the mantle of the Gecko’s(Iaccoca, Gates, Jobs, Welch, Dimon, etc..) mythology of “pulling himself up by the bootstraps”… he stuck both hands into the worker’s pockets. Once upon a time, labor sat at the table, now they’re thrown table-scraps and brainwashed to fight amongst themselves for the leftovers. Deflection is necessary in the few’s perverse grip on the stolen wealth of labor; inequitable distribution.

      So what happened to the employee? Well Eugene it’s a sad story of indentured servitude. Rather than the employees demanding a share of the profits they created with their industrious hands and time, they were indoctrinated to pull out plastic for purchases. The double whammy of the underpaid employee behind the usury eight ball is that of an indentured servant to visa/mastercard. to add insult to injury, the employer checks your credit rating to use as leverage against the bonded servant’s temerity to ask for more porridge with the threat of termination and poverty.

      Here’s the deal Eugene, The Calvinist’s precepts of TULIP is the ascribed dictates of the one percent’s wealth:
      T: total depravity
      U unconditional election
      L:limited atonement
      I: irresistible
      P:perseverance of saints.

      In other words the predetermination of: winners–god’s chosen imbued and protected within grace(the sins of the elect have been atoned in christ’s death), and the losers; hell and damnation determined by god prior to your birth.

      According to the parasitical few, god has chosen them (not you) from eternity to extend mercy (money) to those he’s chosen and to withhold mercy (money) from those not chosen. Who would make this crap up other than the few who claim their godly right to steal the worker’s labor, and justify the enslavement and subordination of humankind.

      Tomorrow a class discussion on Manifest Destiny in the 21st Century. Have a nice day!

      1. Eugene

        Sorry, I participate in profit sharing at my company. I have no idea what you are talking about. The harder I work, the more ideas I generate that come to fruition, the more successful I am at selling products, the more stock I am awarded at review time. And no, I don’t work in the financial industry.

        Yes, I do save for a rainy day. You sound like one of the guys that made fun of me in high school because I worked at McDonald’s to have extra money rather than partying on Friday nights. I cut yards on Saturday mornings while you slept in. I took the hard courses and sweated through chemistry and physics and math. I could read the tea leaves back in the 70’s that manufacturing was beginning to die in this country. I managed to read Samuelson in college. Factor price equalization rang true with me. I knew I couldn’t follow in my Father’s footsteps. I couldn’t depend on producing cast iron pipe at ACIPCO for the rest of my life. I get to enjoy life and you want to complain that I don’t deserve it, that I didn’t work for it.

        I have two pieces of advice:
        Life ain’t fair – get over it.
        Don’t buy stuff you can’t afford.

        1. F. Beard

          The harder I work, the more ideas I generate that come to fruition, the more successful I am at selling products, the more stock I am awarded at review time. Eugene

          Ah, so “shares” in the company are only for the few? Doesn’t every worker normally contribute to the success of a company? Shouldn’t they “share” in the success of the company, too?

          Life ain’t fair – get over it. Eugene

          Yet God commands us to “Do justice” (Micah 6:8).

          1. Eugene

            >>Ah, so “shares” in the company are only for the few?

            Where did that come from? I didn’t mention or imply only the few. I’ll anxiously await your next straw man.

            >>Do justice.

            That depends on who is dispensing the justice and who is measuring the justice. God was kind enough to leave some wiggle room on the subject so we can argue about it. I have a feeling we are a few million meters apart on the subject.

          2. F. Beard

            Where did that come from? I didn’t mention or imply only the few. Eugene

            Well are they or are they not only for the few? If for everyone, then I impressed by your company.

            I have a feeling we are a few million meters apart on the subject. Eugene

            You should read the Bible and then you’ll have more than your feelings to go by.

          3. skippy

            Jephthah’s daughter understood biblical justice, contractual sort…eh.

            “At that time the Spirit of the LORD came upon Jephthah, and he went throughout the land of Gilead and Manasseh, including Mizpah in Gilead, and led an army against the Ammonites. And Jephthah made a vow to the LORD. He said, “If you give me victory over the Ammonites, I will give to the LORD the first thing coming out of my house to greet me when I return in triumph. I will sacrifice it as a burnt offering.”

            “So Jephthah led his army against the Ammonites, and the LORD gave him victory. He thoroughly defeated the Ammonites from Aroer to an area near Minnith – twenty towns – and as far away as Abel-keramim. Thus Israel subdued the Ammonites. When Jephthah returned home to Mizpah, his daughter – his only child – ran out to meet him, playing on a tambourine and dancing for joy. When he saw her, he tore his clothes in anguish. “My daughter!” he cried out. “My heart is breaking! What a tragedy that you came out to greet me. For I have made a vow to the LORD and cannot take it back.” And she said, “Father, you have made a promise to the LORD. You must do to me what you have promised, for the LORD has given you a great victory over your enemies, the Ammonites. But first let me go up and roam in the hills and weep with my friends for two months, because I will die a virgin.” “You may go,” Jephthah said. And he let her go away for two months. She and her friends went into the hills and wept because she would never have children. When she returned home, her father kept his vow, and she died a virgin. So it has become a custom in Israel for young Israelite women to go away for four days each year to lament the fate of Jephthah’s daughter.” (Judges 11:29-40 NLT)


            Ideology’s are built stone by stone beard, to pick out a few seemingly benign, helpful (emotional resolution) or even generous (bias confirmation…cough…neo-conservative natural order stuff) passages in a cut and paste method…is disingenuous at best.

            The old testament is alive and well in the middle east, are you suggesting its usage is applicable in all of the world[?], in its pure form or a watered down version.

            Skippy…some time we should discuss burnt offerings supplied by believers toil, gods nose thingy, and and hungry priests. Ummm extractive behavior by rents[?????] ring a bell[?!], possible copying behavior al a Egyptians and Babylonians?

            PS. funny how some formulas are repeated throughout humanity’s history. How’s Greaber’s book coming BTW.

          4. F. Beard

            How’s Greaber’s book coming BTW. skippy

            Thanks for reminding me. I’ve started it but have not persisted as I should have (Who knows when I’ll have to swat an Austrian gold bug with it?)

            BTW, your experience with the Bible reminds of my own early experiences. I stumbled over literally nearly every word. But I persisted and now I’m hooked. The Lord is fascinating both in the Old and New Testaments.

            And I am in deadly earnest about destroying banking as we know it. I’m not above using the Bible to do so.

          5. skippy

            @beard, said…

            “BTW, your experience with the Bible reminds of my own early experiences. I stumbled over literally nearly every word. But I persisted and now I’m hooked. The Lord is fascinating both in the Old and New Testaments.”

            Me here. Dismissive grammatical structure is not a rebuttal by any degree, barely an engagement of facts proffered. BTW I have over half a human life time of experience and research in the most prevalent human foundation myths and subsequent ideology’s they spawned ie. neo / classical economics.

            beard said… “But I persisted and now I’m hooked.”

            Me here…In your contextual usage its meaning suggests: Merriam – Webster…addicted to narcotics b : fascinated by or devoted to something.

            Well if your fascinated I concur with your emotional sediments, although, if devoted is a better definition I would tread carefully. Beliefs are raped on the event horizon with impunity, see human history (winning is not proof ie. Christianity over indigenous beliefs et al – might makes right…eh.) Banks and the system they represent display similar quality’s…eh. Hence my reference to priests as rent extractors, creation of a higher class system (the many feed the few, based on divinity).

            beard said…”And I am in deadly earnest about destroying banking as we know it. I’m not above using the Bible to do so.”

            Me here…terms like *deadly*, *destroying* anything {my enemy[s?), yep that’s biblical all right and, by now, we should know where that path leads us…eh.

            Skippy…you want a better world, so do I, although, can we find a better hand book[?], rather than one that has brought us here in the first place? I hate to tell you, but, it is the foundation…too every thing to date. The struggle between foundation myths is killing EVERY THING.

            PS. Personally I don’t want to end up in the fossil record with my hands around another humans neck and theirs like wise…an embrace of caring would be a better expression of human potential…methinks…come together or be blow away…eh. Be well beard.

          6. F. Beard

            terms like *deadly*, *destroying* anything {my enemy[s?), yep that’s biblical all right and, by now, we should know where that path leads us…eh. skippy

            You are one confused fellow about the Bible. I carefully said “destroying banking as we know it.” What’s wrong with that? Was destroying slavery in the US wrong?

            So you see, you are attacking a Bible of your own imagination. But I am very happy to see you reading it if only to refute me.

          7. F. Beard

            rather than one that has brought us here in the first place? skippy

            What? The commands against theft and usury between fellow countrymen? The command for periodic debt forgiveness? Those things brought us here?

        2. Lidia

          “the more ideas I generate to sell product”

          What is your “product”? Do people need it or can they do without it?

          Born-again sister went to the “Christian” business school Pepperdine, and when she came out her “innovative” idea, after a few years of study was? “Rent-A-Wheel”—yes, a Rent-A-Center model for leasing those multi-thousand-dollar “bling” alloy car wheel sets adored by certain subcultures in Los Angeles.

          This is a model of pure extraction. It creates nothing but waste. It only “makes” money by extracting it from those poorer and dumber than she, yet to her it was the culmination of what capitalism was supposed to be about. She abandoned the project as she chose to stay home and reproduce (knowing her offspring I don’t know which activity would have been more harmful in the final calculus).

          1. Eugene

            Certain markets really need it, some markets don’t have any need at all. The analogy would be wind shield wipers. In Az they aren’t needed very often and folks don’t have to replace them very often. In Brazil they’re needed very often and because of heavy use they are replaced often. But when you need wind shield wipers you really need them. The only substitute is to pull off the road.

          2. Lidia

            Well, see, I live in a world where pulling off the road and waiting for better weather is ok. If you even need to be on the road in the first place, which for most people is quite questionable.

          3. F. Beard

            If you even need to be on the road in the first place, which for most people is quite questionable. Lidia

            And you wonder why liberals are unpopular?

            Did the Puritans have anything on you guys? At least they offered “pie in the sky when you die”.

            What do you offer?

        3. rps

          Eugene, petulance is unnecessary. First, you claim persecution of being made “fun of” for your choice of earning a paycheck at McD’s rather than partying. There are many more of “you/us” who worked since grammar school at service jobs from cutting grass, babysitting and fast food, and paying for higher education than you recognize. Regardless, you choose to identify your industriousness as the indicator of peer cruelty. High school is an insane asylum of rampant hormonal teens on power trips and tribe identification. Everyone is a target regardless of who you are or aren’t.
          What I’m reading in your tea leaves, “I worked hard, I studied hard, and due to my crystal ball and cleverness, I saw how the world would evolve. I earned every cent I’ve made– damn you all, you’re just envious of my wealth. Suck it up and get over it.

          Eugene, undoubtedly you are right to be frustrated and angry, because you are panicking wondering how to preserve your nest egg,lifestyle, and livelihood. Why Eugene, why the panic? Because you’ve read the tea leaves, they’re coming for your job to send overseas, or perhaps import visa workers, or whomever they can employ at half your salary with no benefits. It’s much easier to delude yourself with a false belief system of who’s deserving and who’s not. As if people raise their hands to be poor. I know of people with their PhD working at Macy’s and other minimum wage jobs, and it’s not a choice. The Gecko’s started destroying the UAW’s laborers in 1979, and since then, the industrialists and corporatist have been moving up the food chain in a search and destroy mission of American jobs. Why?, they don’t want to share labor’s profits. The poor miserably misunderstood Gates and Job’s of the world must preserve there ill gotten gains. Plus the maintenance costs on their castles and private planes, and islands is simply an necessary outrageous expense to proclaim their superiority over the rest of us, and gamesmanship within their peer group. Weber states, “He who has the most toys when he dies win.”

          Therefore, they destroy American livelihoods in search of cheap foreign slave labor with no human rights, civil rights, liberties, or social safety net systems.
          For now you can choose to believe due to your diligence, education, and job perks, that perhaps you’re not really in a cattle chute. However, not only are you in the cattle chute, your ear is tagged with an expiration date.

          “Separate an individual from society, and give him an island or a continent to possess, and he cannot acquire personal property. He cannot be rich. So inseparably are the means connected with the end, in all cases, that where the former do not exist the latter cannot be obtained. All accumulation, therefore, of personal property, beyond what a man’s own hands produce, is derived to him by living in society; and he owes on every principle of justice, of gratitude, and of civilization, a part of that accumulation back again to society from whence the whole came.”

          1. Eugene

            Actually I am quite relaxed. I enjoy mountain biking four times per week and fishing every so often in the White River.

            As far as being in a cattle chute, sorry, I own horses, not cattle.

            I wrote some time ago that in this world, you had better be prepared to earn the equivalent of an associates degree every two years. In this economy, with it’s speed of change you cannot quit learning or changing. There’s no such thing as a comfy job. Six years ago, Intel was on top of the world. Who would’ve thought the iPhone would change all of that, or at least create huge waves in the PC market? Folks that thought they could happily assemble MP3 players the rest of their lives are no longer assembling MP3 players. Ad nauseum…

          2. F. Beard

            I wrote some time ago that in this world, you had better be prepared to earn the equivalent of an associates degree every two years. Eugene

            I doubt the bankers have to work so hard. And those who have inherited ill-gotten wealth? Hardily at all, I’d bet.

        4. reslez

          Wow Eugene, you certainly sound exceptional. You know, exceptional — meaning by definition most people aren’t as capable as you. Maybe they physically can’t, or they have family obligations, or they’re not as smart as you, or because (as you believe) they’re lazy. (So it’s OK for them to suffer, they deserve it, even though since they’re suffering the rest of us have to suffer too.)

          A system that doesn’t work for most should be replaced with one that does. Have a nice day!

          1. F. Beard

            A system that doesn’t work for most should be replaced with one that does. reslez

            The implicit social contract is that bankers and the so-called “credit-worthy” will make life better for everyone else by stealing their purchasing power and investing it wisely.

            That contract is not delivering on its promise any more.

          2. Eugene

            I think it does work for most people. I think there are more people trying to get in to this country than get out. Last time I checked, Mexico doesn’t seem to have an illegal immigration problem with Americans streaming south over the border. Just because you think you deserve more of the economic pie simply “because” doesn’t mean it’s not working. Maybe there is some other underlying cause regarding your piece of the pie.

          3. F. Beard

            I think it does work for most people. Eugene

            So why do we have high unemployment? The minimum wage?

            What would you do to fix things?

          4. F. Beard

            Maybe there is some other underlying cause regarding your piece of the pie. Eugene

            How high does unemployment have to get before you cease to slander the innocent?

            May your job be the next to go if you persist.

        5. jonboinAR

          You know what, Eugene? I believe you may have worked twice as hard, been twice as productive, been twice as wise as I have. I’m willing to allow you, without fighting against you in every legal way I can muster, to “earn”, say, 4 or 5, maybe 10 times what I do. I’m not willing to allow you to gather to yourself thousands of times what I make while my lifestyle degenerates and my safety net disappears. If that happens(and it looks like it is) I will do all I can to return a measure of income distribution like we used to have. Your pretty song about how deserving you are relative to others around you does not explain how close to 100% of the new wealth gains in this country since the ’80’s began have gone to those who were already wealthy. The rest of us have no moral obligation to clean your boots with our tongues.

          1. Eugene

            When I was a tweener, I suggested to my Father that we should distribute the money of the Rockefeller family to everyone in the U.S. My Father dragged me down to the library and made me do some research. I finally had to admit that giving everyone in the U.S. $3.12 wouldn’t do very much good back in 1959. So today, let’s take all the money and assets from the 10 richest people in the U.S. How far would 400 billion go? Would taking all the money from the 10 richest people in the US and dividing it up go very far? How does $1,333 dollars per person sound? Now remember this is a one shot deal. Most of that money would be squandered pretty quickly and end up in the hands of other industrious entrepreneurs. We would redistribute the wealth, but pretty soon, it would end up in the hands of 10 people.

            Now let’s take the 100 richest people. Surely we are talking a lot more money? How about something close to $3,000 per person? So how much good would $3,000 do when we make a one time distribution to each and every citizen?

            Sorry, but I don’t buy your feelings of moral righteousness on income distribution.

            However, I do believe that legalized theft did occur with TARP and all that followed. It’s not even you or me that will pay for this. Our great grandchildren will be paying the full price for what happened. We’ve mortgaged our children’s freedom to bail out the people that caused the problem.

          2. F. Beard

            Our great grandchildren will be paying the full price for what happened. We’ve mortgaged our children’s freedom to bail out the people that caused the problem. Eugene

            Wrong. That debt will either be repudiated or paid off with seigniorage.

            And morally it is impossible to indebt a future generation.

            And physically it is impossible to borrow from the future. Got a time machine?

            The money system you defend is full of holes – ethically, mathematically, and physically.

          3. F. Beard

            Sorry, but I don’t buy your feelings of moral righteousness on income distribution. Eugene

            In you they have taken bribes to shed blood; you have taken interest and profits, and you have injured your neighbors for gain by oppression, and you have forgotten Me,” declares the Lord GOD. Ezekiel 22:12 [bold added]

        6. skippy

          @beard, wrong on all accounts. Your usage of countrymen (OT) is incorrect, it should read Jewry. You can verify this at any Temple – Synagogue, the Torah was written for gods chosen people. The new testament is a compilation of regional prophets writings commanded by Constantinople for political reasons (cessation of hostility between regional factions under Roman rule ie my prophet is better than yours, let fight about it. And it is incomplete, some lesser regions lost out due to politics or the larger numbers in the counsel voting against various authors.

          Any way, cherry picking data from any source is deceptive, if you don’t understand the hole, how can you make sense of the individual components? Kinda like economics or OTC derivatives…eh

          skippy…half my family is Jewish and the other half Christian, plus my front door is kinda like a training ground for 7th dayers. One gentlemen in particular has 30 years of study and experience, great debates!

          PS. last time they sent 7 teenage girls over for a chat…LOL!

          1. F. Beard

            You can verify this at any Temple – Synagogue, the Torah was written for gods chosen people. skippy

            Yes, but according to Paul, believing Gentiles have been “grafted-in”. Paul also says that “all Scripture is profitable for …”. So I reckon as a Gentile believer I have a right to use the entire Bible.

            As for the New Testament, the evidence is that it was completed before 100 AD.

          2. F. Beard

            what a smorgash borg…eh…would you like a big plate or small one? skippy

            Ultimately, one must trust in God’s Providence that one has the correct Cannon or at least an adequate Cannon. And I’ve been assured that if one heeds the light given one that more will be given.

            But as for me, it took me a long time to decide on a spiritual guide. I am content.

          3. skippy

            Contentment, does not support validity, nor lights going of in ones head. Any way, how can individuals make informed decisions with out *all* the information. Why do folks only get the smallest amount of information to base their decisions upon or just have it inserted as a tribal – cultural norm?

            Skippy…how can you choose…what you don’t understand. Beliefs are raped with impunity for a reason…what is the underlining to support it. World flat = False, Center of the Universe = False, yet every thing else is Okie Dokie. how many things can you get wrong and still claim truth? Gaussian cupola[???] oh yeah its offspring are too dominate now, fixing it could kill.

          4. F. Beard

            Any way, how can individuals make informed decisions with out *all* the information. skippy

            We make decisions all the time with less than perfect information. Use your best judgement.

          5. F. Beard

            World flat skippy

            Chapter and verse, please?

            Center of the Universe skippy

            Chapter and verse, please?

            yet every thing else is Okie Dokie. skippy

            The Bible sometimes uses phenomenological language such as “The Sun rose …”. Big deal. And with an Earth-centered reference the Sun does rise and does orbit the Earth.

      2. Lidia

        rps, I love that “TULIP” mapping. Very succinct. I’d always felt there was a strong legame between “reformed” Christianity and ruinous capitalism.

        From my experience, one aspect is that: they don’t care. Fundamentalists, like “free” marketeers, are sociopaths who don’t care that they condemn the majority of the world to hell: the majority of the world’s going to hell is a FEATURE, not a bug.

        Both Augustine and Calvin sold being able to witness the masses burning and writhing in the torments of hell as a perq of sainthood and election to heaven. Non-stop entertainment for the sadistic “righteous”. (Face it, heaven does sound boring otherwise.)

        So, too, are the underclasses who can’t make unworkable capitalism “work” for them vigorously condemned to hell… the same sort of trap that religionists set up for their believers: the system is designed not to work on your behalf, yet we demand your fealty to it nonetheless.

        1. F. Beard

          Both Augustine and Calvin sold being able to witness the masses burning and writhing in the torments of hell as a perq of sainthood and election to heaven. Lidia

          Then I would not expect to see either of them in Heaven or if I do they will have long since repented. Hell was created for Satan and the Fallen Angels who had NO excuse for their FALL and CANNOT repent. The Lord would prefer that no humans go there but that depends on us.

          Non-stop entertainment for the sadistic “righteous”. Lidia

          No, but the example of the consequences of sin might enable some otherwise unreliable folks to safely be let into Heaven.

          (Face it, heaven does sound boring otherwise.) Lidia

          The most interesting people will be there. I would bet that those in Hell will turn out to be the most boring.

  15. RSDallas

    I think this article articulates just how hard it is for a family to survive on say $100,000.00. Just sit down and do the math sometime. For a married couple w/ 2 kids.

    Car Insurance $1,600/yr,
    medical insurance $9,800/ year.
    Life insurance $600/ yr.
    House insurance $1,200/yr.
    Food $5,000 per yr.
    House payment $9,120. (150k at 4.5%i) per year.
    Property Tax (150k house in Dallas Texas) $4,500 per yr
    Electricity $3,000 per year.
    City Water 1,200 per yr.
    Natural gas $300 per year.
    Sewer and sanitation $960 per yr.
    Cell phone $700 per yr.
    Home phone $250 per year.
    Cable $780 per year.
    Internet $660 per yr.
    Clothing $1,600 per yr.
    Home repair $1,000 per yer.
    Car payment $8,400 per yr.
    Gas $2,400 per yr.
    1 vacation $4,000 per yr.
    After school care for 2 kids $9,600 per yr.
    2 sports per yr/child $300 per yr.
    Eat out 1 time per month $500 per yr.

    This alone is $67,470.00. So if a couple makes $100,000 less 25% federal tax that leaves them with $75,000.00 less expenses equals a surplus of $7,530.00. And you know the family is going to have several thousand dollars of unforeseen expenses come up during the year. Well that’s barely over 1 months of expenses.

    What’s amazing is that yesterday Bernanke said repeatedly that inflation has been and will remain under control. This alone should be a reason to end the Fed.

    1. End Sarc

      It’s like a modern day tragedy, isn’t it RSDallas? That family, only able to afford one $4,000 vacation, only once every year to make up for lost time while the after school child care takes over from school in raising their kids. It’s hell out there…

      1. Darren Kenworthy

        I suppose the after school child care is for before the two working adults get home. I don’t understand your scorn. The fact that most Americans are less well off then the example is the point.

    2. rps

      1.Food costs should be doubled.
      2.House repairs/appliance replacements/law care/infrastructure costs etc………at $1000 too low. House maintenance servicing costs easily $5000.00 and up per year.
      3. cell phone $700yr/$58per month….low balled, try $1800/2400 per year.
      4. gas/car $2400 no way— 2 cars filled once per week $100+ or 1 car filled twice per week = $5200.00
      5.Clothes at $1600.00….. triple it

      1. RSDallas

        Many of these numbers are probably low. My point is that Americans can’t save anything for a rainy day. We have a system that allows the Fed to create inflation within a system that allows wages to fluctuate with demand. 2% sounds like nothing, but the impact over time is huge. The Fed should not be allowed to manipulate the system to produce inflation. Inflation should mirror demand so the both sides adjust both on the up swings and on the down swings. Also keep in mind that only +-19% of the working population brings in $100,000 or more. The Fed is single handily pushing 80% of our population into poverty. We need a bad case of deflation right now.

        1. Bill G

          I suggest you cut your expenses by 20k/yr and save that money. That is pretty easy to do – you just have to do it.

    3. Richard

      Well, to be honest, that’s really a product of lifestyle inflation and your priorities. Check out Get Rich Slowly. People there advocate cutting “wants” and saving.

      Those of us who have followed their advice of living frugally and accumulating rainy day savings are living worry-free, even if a layoff or two comes up.

      In living the student lifestyle, I had a roommate and cooked my own food. I didn’t indulge on exotic foreign vacation. I took public transportation or biked instead of owning a car. In doing so, living expenses were ~ $500 per month. If you keep that up a few years after entering the work force, you can accumulate substantial savings, enough, with prudent investment, to retire in 10-20 years.

      If you guys spend time among Mexican immigrants in the US or Polish workers in London, you’ll see how tough we are. We’re used to living a lower standard than most Americans (e.g. shacking 3 to a room), so the plenty and abundance that people have here is astonishing (e.g. SUV for every kid by 16; *shakes head*). It’s also seen in how they refuse to work hard and save.

      Also check out the NYT story on American workers who can’t tolerate field labour.

      I’m not criticizing those who don’t want to work as hard. But you have to reap what you sow in the end. You can’t simultaneously spend above your means and expect any degree of security. It’s the same mindset with which frugal Germans shake their heads at what they view as profligate Mediterranean types.

    4. decora

      rolls eyes.

      if you are struggling to make ends meet on $100k/year, you have mental problems. if you don’t believe me, when you “go out to eat once a month”, ask the waiter, greeter, cooks, etc, how many kids they have and how much money THEY make in a year. then ponder how it is that someone who can manage their money 4-5 times more efficiently than you is making enchiladas, while you are managing a government budget or something.

  16. ep3

    But yves, don’t politicians always pump prime the economy going into an election year? Bush passed that tax refund in May, and the crash was really an isolated incident.

  17. Psychoanalystus

    Let ’em eat cake! I’m with FatCat on this one.

    Where were they all these years? Soaking up the exceptionalist hubris?

    1. F. Beard

      Yes, Heaven forbid anyone have running water, sewage and gas much less an enjoyable life style.

      Do you hair-shirt enthusiasts think the Lord will commend you on the off-chance (in your mind) that He exists? Or do you think He might instead ask what business was it of yours how well others lived if it was no skin off your nose?

        1. F. Beard

          Like the Good Book says, “Pride cometh before fall”. Psychoanalystus

          Even the poor can be proud and sometimes especially the poor. Those who are well off are often grateful and humble.

          Heck. Here it is 2011 and Americans are in danger of having to live under a bridge? Who ORDERED that?

          1. Joe Rebholz

            “…live under a bridge …” Many homeless people now live under bridges. Here in Tucson one man under a bridge was swept away and drowned about a month ago in a flash flood. News for a day or so. Now forgotten.

      1. Lidia

        Humanure, my husky friend. Humanure.

        I think it’s pretty funny how you’re all so “christian” and so forth, and yet you don’t see that list for the obscenity that it is, with respect to the rest of the world. There are only a few hundred million people on the planet whoare granted, or who have wrested from others, the lifestyle Mr. “Dallas” (or is it “Falconcrest”?) whines about as being borderline-impoverished.

        For most kids on the planet “Sport” is a $5 soccer ball and a dirt alley, not grotesquely expensive leagues with full uniforms and gear for five-year-olds, for example. Pele did not pay to go to any sleepaway soccer camp as a kid, that I know.

        The planet is finite, so of course it is all “skin off” all our noses. You might believe that some supernatural being will in the future multiply the loaves and the fishes by magic, but it ain’t happening, FB, it ain’t happening. The whole fish metaphor is fished out just as the oceans are fished out. A whole lot more pain is headed our way that what Mr. Dallas outlines.

        1. F. Beard

          I think it’s pretty funny how you’re all so “christian” and so forth, and yet you don’t see that list for the obscenity that it is, with respect to the rest of the world. Lidia

          No, rather much of the rest of the world is obscenely poor.

          But I do grant that the population in the West has been given a “mess of pottage” in exchange for its birthright. Most of us would probably be healthier back on the farms the bankers drove us off of.

          And what the heck is obscene on that list? The average American is lucky to get 2 weeks of vacation. I suspect the ancient Hebrews got more vacations (They were called ‘fiests’ back then.)

          As for overfishing, that is an international resource management problem. There is no excuse for it.

          1. Psychoanalystus

            The Good Book also advocated debt forgiveness (jubilee).

            The fact is, the shallow, self-centered, self-righteous, narcissistic, war-monging kind of so-called Christianity practiced in America is an embarrassment not only to Christendom, but to religion overall. America and its millionaire televangelists are a joke that the world laughs at every day. Most evangelical Christians in this country are so uneducated, so simple-minded, so brainwashed, so materialistic, Christ would probably be very embarrassed to be associated with.

            Religion in this country is just another cheap brand, like Nike or Apple. That’s all. The problem is, last I read the Bible, Jesus Christ did not strike me like some kind of greed-driven American CEO (despite a number of worthless evangelical “Christian” books that claim that he was just that).

            Most certainly, American evangelical Christians are the wicked “goats” that Christ promised to tell “depart from me, I never knew you”.

          2. F. Beard

            Most certainly, American evangelical Christians are the wicked “goats” that Christ promised to tell “depart from me, I never knew you”. Psychoanalystus

            I think you are referring to this:

            Matthew 7:15-25.

          3. F. Beard

            The Good Book also advocated debt forgiveness (jubilee). Psychoanalystus

            Absolutely. And it does so in the Old Testament (Deuteronomy 15). And that was for legitimate debt! How much more do you suppose debt-forgiveness is commanded for debts to a government enforced counterfeiting cartel?

            But since the counterfeiting cartel cheats savers too, a universal bailout is more appropriate.

        2. F. Beard

          You might believe that some supernatural being will in the future multiply the loaves and the fishes by magic, but it ain’t happening, FB, it ain’t happening. Lidia

          Actually, He already has. I don’t see why He shouldn’t continue to do so if we will repent as necessary.

          1. Lidia

            FB, what you have received, the good lord Franklin Delano Roosevelt saw fit to organize for you.

          2. F. Beard

            the good lord Franklin Delano Roosevelt saw fit to organize for you. Lidia

            FDR had a chance to crush the banks with a Postal Savings Bank. Instead, he propped them up with the FDIC.

            And look how long and hard the Great Depression was! I’m not impressed with FDR.

            Still Social Security is an excellent idea. No one who works for a sufficient period of time should be denied a decent retirement.

            And infrastructure spending was a good idea too.

          3. Lidia

            To the uninitiated, I recognize Fatbeard from over at Mish’s place, where he shared his source of income.

            (No supernatural creatures involved, just the socialist welfare state.)

          4. F. Beard

            (No supernatural creatures involved, just the socialist welfare state.) lidia

            Actually, it was a miracle how that all worked out for me involving a fatal red head, two-broken leg bones, a mental hospital for 10 days and a few years of all the drugs I ever wanted from an obliging shrink. But yes, I draw SSD after having worked all my life since a paper-boy in High School including working my way through college to earn an engineer degree.

            But I am not a hypocrite about it. Why do you bring it up?

          5. F. Beard


            All’s well that ends well!

            I was always afraid that I could not stand the pain of a broken bone. Well, I smashed both my tibia and fibula in my right leg on Valentines Day in 2003 and had to wait 16 hours till I could call for help.

        3. rps

          Lidia, Michael Kimmel wrote a insightful essay, “Masculinity as Homophobia (fear, shame, and silence in the construction of gender identity).” It ties in nicely in the socioeconomic patriarchal paradigm and the current upheaval that’s necessary to upright the ship to create an egalitarian structure.

          1. Dan G

            One often hears of top down or bottom up investing.How about the bottoms up devesting which will be a bottom -up squeeze from:
            ·The additions to welfare, foodstamps, medicaid, social security etc…
            ·The continually increasing defaults on credit cards and/or mortgages
            ·Those leaving the work force to retire- net defationary
            · The unsustainable house values/average income ratio requires lower house
            · Baumol’s cost disease Productivity/income ratios

            Eventually unemploymnet increases because growth below 3% GDP will not allow the unemployment rate to drop. In addition, lower house prices feed the spiral down in job related housing employment. Also, the productivity gains through robotics, outsourcing etc… that has allowed large international companies to show increased earnings has not resulted in increased wages for the workforce where prodctive gains have been realized, only for the workforce where prodctive gains have not ramped-i.e.-banks, healthcare, finance, government beurocrats etc…(See Baumol’s Cost Disease) Thus, the contagion will spread, even to many of the wealthy. The interconnectivity of overleveraged capitalism plays out by the top feeders of the income pyramid at each successive level being unable to squeeze as much income out of the level just below them. The lower levels get hit first but it eventually it spreads to the top as it must. The top feeders eventually need the bottom feeders at each succesive below them.

  18. chris


    Yes, please edit trolls. But also indentify the sycophants- you know the crowd that doesn’t dare pose a question to anyone or keep you up on your pedestal.

    1. Kevin Murphy

      Moderating the boards (comments), would be a bit of work. That could be a problem. Also, who to censor? That said, there is a fair amount of nastiness in the comments, especially directed towards those who may seem out of the mainstream of thought here. Not as bad as a Yahoo board but still ….

    2. Yves Smith Post author

      That comment is asking for it. You’ve just slurred everyone who does not disagree with a post as a sycophant AND given me an order.

      I’m tolerating you but your behavior is pretty troll like. More no value added comments (and you’ve already had a few in this thread alone) and you are no longer welcome.

      1. Chris Maas

        Appreciate your reply directed to “chris” (not me, some other chris!). Maybe this makes me a sycophant, but I really value this blog. It’s risen to the top of my daily reading list – almost as much for the intelligent comments (give or take a troll or two) as for the well informed posts. Don’t change a thing.

  19. Hugh

    In a system as corrupt as ours, the only way people can successfully live within their means is by luck or by participating in and benefiting from the corruption. Neither of these is particularly virtuous.

    1. Kevin Murphy

      Does an R.N. participate or benefit from the corruption ? I ask only because I know a few and was just wondering.

      1. Hugh

        The question is not the few people you can think of who might be the exceptions but everyone else. That said, yes, they do benefit from the economics of a rigged system and a captive market. This doesn’t mean necessarily that they are overpaid for their work but that almost everyone else is underpaid for theirs.

  20. MyLessThanPrimeBeef

    I think there is a novel about how a totalitarian state controls its citizens by making everyone one paycheck away from being homeless. (It has taken about 40 or 50 years of non-stop brainwashing through the state’s partners in the social/entertainment/fashin media to ‘enlighten’ its ‘exceptional’ citizens that they should be richer, prettier and having more fun in life than the rest of the world, even if they don’t have the money) Being put in constant fear of the ultimate disaster of not being exceptional, people become pliant. Who is going to protest if one’s one paycheck away from falling into the abyss?

    That’s part one.

    Part two deals with how some brave souls embrace Neo-Neanderthalism and escape into the wild. They believe less consumption is not only more filling, but it frees one from his dependence on ‘the system’ or ‘the machine.’ Instead of, for example, adopting greener gadgets to keep the consumption ponzi scheme going (thus ensuring continuing system dependence or machine dependece), they reject them all together. They much rather consume less… they know it’s better to live the local, simple and yet diverse ways of their Neanderthal forbears – free and in peace not just with their immediate environment, but also with far-away strangers with whom they have no contact (and no subsequent deficit/surplus paradoxes).

    I forget the name of that sci-fi though.

  21. Kunst

    “So what’s the present-day analogue of the occupation of the Ruhr by the French Army in the post-WW 1 period?”

    It hasn’t happened yet, unless you count 9/11. More to the point would be the trillions of dollars 9/11 has cost us, both directly in Afghanistan and Iraq and indirectly in the financial and social harm it has caused within the country. That damage continues.

    Personally, I think Vietnam (another misguided war spawned by right-wing forces that are rampant today) will be viewed as the beginning of the US’s decline.

    But the Ruhr-occupation event hasn’t occurred yet. It will be when we take a severe military blow, such as China taking Taiwan by force. Then everyone will know that the US no longer has the power to control the planet. Yes, we already know that intellectually, but it will take a blow to the gut to make it real.

  22. John D

    THis is why the people who backed Obama are searching around for a new front guy. They aren’t stupid, and contrary to what some believe they have the best of abilities to monitoring the chatter of the average american. What they can’t control is the flow of information that has been unleashed by the internet, blogs, and protests around the world.Hence the black-out and denigration of Occupy and anything that proposes the staus quo has failed.
    Right now people’s ignorance is working i their favor and the analogy to Weimar Germany is not all off. If you read the Wikipedia entry for Weimar you will see that it was a pitched battle between many forces in a society that was struggling to come to terms with debt, war, debt and social changes.
    In this the USA is very much the same. We have the credit card war of Iraq, Afghanistan, and low-level Pakistan. We have houshold and government debt. We have divides in social sectors that are the biggest I’ve ever seen.
    It would be easy to manuever the nation into fear of a couple of enemies in order to avoid the obvious self-inflicted wounds that the USA has done. ANybody need to take a trip down memory lane to 9/11?
    That is why I don’t support this site or any site criticizing the OccupyWallStreet people. At least people are willing now to say enough of the bull. Trickle down isn’t working.
    Reminds me of people who debated wether Hitler was realy a Socialist or a Capitalist as he fought to attain power with his merry band.It went back and forth between a couple of different groups for awhile.
    This isn’t to say we are Germany 1930 or Soviet 1979 but the EMpires wheels are coming off and it’s certain to be bumpy with a lot of different types wanting to take the driver’s seat.It also means that safety will become relative in the future. I already get that in my neighborhood. The people don’t know exactly what’s up but they don’t like the coffee right now. It’s sad that Powers That Be spend so much time deflecting rather than facing the nation and telling it like it is.

  23. Prairie Rose

    I read a lot of economic blogs and Yves, your blog and especially your commenters are truly the best of the best. I agree with Chris Maas above–don’t change a thing.

    As for the hapless Middle Class, I’ve been watching inflation steal every cent of my raises since, oh, the middle of the 1980s. Nowadays it’s a luxury to be single (living alone). Rent in my metro area is as much if not more than owning a mortgage. On a $50,000 per year salary, trust me, it’s hard to save even $5,000 for a Roth IRA.

    We The People been well and truly sold down the river. And we are not without responsibility for the sorry state of things. An uninformed, apathetic populace is a malleable populace. And now we have Kamikaze Congresspeople together with the Banksters wreaking more havoc against the Middle Class in less than two years than it’s taken the anti-New Deal crowd to accomplish in four decades. Astonishing.

    1. Richard

      I’m sorry that your lifestyle isn’t keeping up. You have to understand though that global competition is here to stay. Workers in Asia are making far less than you and arguably just as skilled and hard-working. What entitles you to making so much more than they are?

      Eventually there will be a global convergence in living standards. Get ready for it! It’s impossible for everyone in the world to live like an American; we’d need 11 planets!

      Dickins said it best: “Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery.” Live below your means and you’ll be far better off for it.

      1. different clue

        Do you suggest that the living standards of the OverClass converge with the living standards of the Underclass then? If you are suggesting that the living standards of Mr. Tata ( of Tata steel and Motors) should converge with the living standards of “Joe Homeless” (who wrote a book called My Life by Joe Homeless), then I will accept your suggestion as being offered with sincere intent.
        Otherwise, I suspect you are trying to trick us into accepting social class privilege apologetics of some sort.

      2. LifelongLib

        The workers in Asia who are competing with the American middle class aren’t living like paupers. They make less in absolute dollars but their lifestyle is affluent — because they can take advantage of the poverty that is still endemic in the societies around them. That poverty (not working harder or accepting a lower standard of living for themselves) is the reason for the labor cost advantage. You’re probably right that there will be a global convergence. Then workers everywhere will be focus on the non-working wealthy who’ve been taking advantage of them. Get ready for it.

  24. Roland

    The political shift will not be to the left, at least not until everything else has been tried.

    Few willingly give up their self-identified social status. Few, therefore, will willingly acknowledge their powerless, property-less, proletarian status.

    Instead, even many of those who have lost everything will cling to whatever shreds of special-ness which might remain to them. They will become enraged by any who suggest that they actually have nothing left.

    An angry proletariat, unwilling to acknowledge themselves as such, make a natural target audience for authoritarian, nationalist, militarist demagogues, i.e. the “fascist.”

    The authoritarian demagogue offers violence to satisfy the public’s anger. After all, who wouldn’t like to see a live streaming webcast of some banker getting all the teeth kicked out of his mouth? Millions and millions of hits, it’s viral!

    A whole bunch of other people can get beaten up, too. Take the muggers and shoot ’em all. If the whiny lawyers object, shut them up too, with a rifle butt to the face!

    The authoritarian invites our distressed prole a life-ring of identity: “Devote yourselves to our great and famous nation! Re-establish our well-deserved global supremacy! Crush any who question or defy us! Pre-emptive war against any whom we suspect!”

    Fascism in America, while not looking too much like the Blackshirts, and while lacking the particularly selective ethnic animosity of the Brownshirts, will neverless evince the key components of nationalism, authoritarianism, and militarism.

    It’s not hard to imagine, you guys are halfway there already.

  25. polly sigh

    We really should be figuring out how we got here in the first place so we don’t repeat it in the future. I believe we as the US (assuming most of you are from the US)are in large part to blame for this problem because we have become a very greedy society. People line up at Best Buy or the Apple Store for that next brand new COMPLETELY UNNECESSARY gaming system or iPod/iPad/iPhone. I just read somewhere that the Olsen twins are marketing a new bag that costs $39k and are now sold out…WHO ON EARTH NEEDS A $39,000 backpack? I was always told by my parents that no matter what you pay yourself 15% of your paycheck and put it into your savings because some day you will need it. I am glad I did! So many people think their available credit is their money. I see people spend nearly $15/day on coffee alone. I don’t even spend $10 day on food for my family of 3 (eating 3 square meals of mostly protein, fruits, and veggies – no junk). These problems didn’t really exist when I was younger because people didn’t eat out that much. For most familys going out to McDonalds once a month was their big night out. Times have changed and the consumer created the mess just as much as those “other guys”. Why can’t we as a society scold ourselves for being too materialistic and stop pointing the finger at someone else? I am only using some examples here. If I went all out and said it all you would be reading a book. If we all change our ways those big corportate meanies will be forced to change too.

    1. A Real Black Person

      Capitalism depends on growth. This growth can stem from either a growth in the number of consumers or greater consumption amongst a stable population. Since population growth is not growing drastically, anymore, businesses can’t depend on selling to more customers to meet shareholder expectations but they have come to depend on selling to the same number more products and services. They hire marketers,salesmen, artists, to convince people that what they’re selling has social value and, over time, it does. A $39,000 backpack exists because many wealthy people like to buy expensive things to display their social status.

      You know how they say the business of America is business? Well, it’s true. Capitalism is the only thing that holds America’s pluralistic society together.Therefore, it’s very important that people be convinced to buy more stuff they don’t need, whether that’s a $39,000 backpack or the very expensive but very envied “college experience” because the alternative is some level of social collapse.

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