Originally Posted by OVERKILL
Originally Posted by StevieC
But with Minimum wage earners spending back into the economy at higher rates proportional to their income than CEO's would it make sense that it would drive middle class jobs and thus we would feed the CEO's and wealthy elites? It's a ladder effect right?
We are stalling out because the lower classes are broke.
It's no anomaly that the economy has increased debt load largely at the same time wages have been stagnant and living costs have increased. We can't fix the problem without investment.
You wouldn't expect a return from a bank or financial advisor without investing first would you? They broke the investment loop with cheap offshore labour and then broke it further by stagnating wages when sales missed expectations from breaking it the first time by offshoring things. So their answer? Cut further and this cycle continues but they don't realize one feeds the other.
MADNESS! Definition of insanity is expecting different results without changing anything right?
Yup. "Back in the day" before the offshoring, you had a very large pool of people who were all invested in the various stages of production and procurement. Those that worked in manufacturing could and would buy the products they made. The paradigm shift occurred, as you noted, with the offshoring of manufacturing. That previously generous base contracted, those well-paying jobs disappeared, and these were replaced by the "greeter" and "McJob" and so you had a group with significantly less buying power spending more of what they had just to live. These folks could no longer afford to buy the products they used to make and the responsibility of that procurement shifted up the ladder a rung, landing on those only a bit better off than those other folk. Prices increased, but wages didn't. At the same time, the cheapening of products being offshored drove up consumption and this resulted in the "Walmartization" of society. To continue to boost profits, selling more junk was a better business model than selling fewer quality goods and it was discovered that people would be surprisingly tolerant of buying garbage with a reasonably short lifespan.
Low interest rates to spur consumption and maintain momentum has allowed for price growth to significantly outpace wage growth. Terms have gotten longer and have allowed those stuck in the wage rut to buy more "stuff". Because the system needs people buying "stuff" at an ever increasing rate in order to not implode.
You are 100% right that the "system" was broken with the ability exploit cheap 3rd world labour. It took a sawzall to the bottom of the ladder and now it doesn't work properly.
So, what is the "fix" in a nutshell?
-Move away from globalization/off-shoring/cheap labor
-stop the rapid inflation to increase purchasing power, increasing wages seems to be putting the cart before the horse?
-Stop taxpayer funding of meth mike and his bro-dozer so he actually has to get a job and be a productive member of society?
-Roughly half the "budget" in the US looks to be supporting nonsense like meth-Mike, driving up the insane national debt, decreasing the value of the dollar, meaning more social welfare is "needed", rinse repeat.
It would seem we are in a pickle.
Can anything be done besides/before a crash and reset of the system?
