Why are Americans down on the economy?

[Vic]

How many times do you hear it?
It goes on all day long
Everyone knows everything
And no one's ever wrong
Until later

Who can you believe?
It's hard to play it safe
But apart from a few good friends
We don't take anything on faith
Until later

Show Don't Tell

SHOW ME DON'T TELL ME
You've figured out the score
SHOW ME DON'T TELL ME
I've heard it all before
SHOW ME DON'T TELL ME
I don't care what you say
SHOW ME DON'T TELL ME

You can twist perceptions
Reality won't budge
You can raise objections
I will be the judge
And the jury

I'll give it due reflection
Watching from the fence
Give the jury direction
Based on the evidence
I, the jury

SHOW ME DON'T TELL ME
Hey - order in the court
SHOW ME DON'T TELL ME
Let's try to keep it short
SHOW ME DON'T TELL ME
Enough of your demands
SHOW ME DON'T TELL ME
Witness take the stand
SHOW ME DON'T TELL ME

SHOW ME DON'T TELL ME
Hey - order in the court
SHOW ME DON'T TELL ME
Let's try to keep it short
SHOW ME DON'T TELL ME
I don't care what you say
SHOW ME DON'T TELL ME
Let's see exhibit A

 

[WhipperSnapper]

Originally posted by: dmcowen674

When the have not group is big enough of used to have's you will see a full scale revolution against the rich and the Government they own.

It's that simple and it's happening right in front of our eyes.

There isn't going to be a revolution because Americans have taken the notion of personal responsibility and meritocracy to an almost religiously-held dogmatic extreme. Those formerly middle class Americans will not blame their government and the nation's economic system, rather, they'll blame themselves for not being good enough--for not having worked hard enough, for not having interviewed well enough, for not having enough education, for not having chosen the right fields, etc.

A good analogy would be a person who has been dragged into a death camp who blames himself for his predicament. "If only I weren't Jewish." "If only I had blond hair." "I deserve to die, it's my fault."

 

[Bowfinger]

Originally posted by: ProfJohn

Originally posted by: PrinceofWands
In my opinion that's one of the biggest factors. The high middle-class and up are doing better than ever, but everyone else is falling through the crapper floor because good jobs are all but gone and everyone is left with barely better than minimum wage service industry work with no benefits.

That is such a bogus excuse.

Did you notice that no one seemed to use that excuse when Clinton was in office and we had the greatest economy ever?
But if you look at the data you will see that by nearly every measure the economy is as good today as it was at any time during the Clinton administration, excluding the tail end of the dot com boom.

Proof:
Race and Hispanic Origin of People by Median Income
Median income for males in 2005 was $31,275 which is higher than all but the last three years of the Clinton Presidency.

Historical Poverty Tables
Poverty rate for all people is 12.6% which is lower than every year of the Clinton Presidency but the last two.
12.6 is also lower than EVERY year from 1980 to 1998.

Great spin. Someone less partisan might point out the bigger theme, that poverty decreased under Clinton while median income increased. Under GWB, however, poverty has climbed again while median income has steadily declined.

Homeownership Rates for the U.S.
Home ownership rates for 2006 were between 68.5 and 69%.
In 2000 the rates were between 67.1 and 67.7
In 1990 the rates were between 63.7 and 64.1
If everyone is making minimum wage how come home ownership is near it's highest level ever?

Couldn't possibly have anything to do with low interest rates making home ownership more affordable, could it?

 

[WhipperSnapper]

The lyrics from the song that Vic quoted are from the rock band Rush. A great song and group, btw.

 

[LegendKiller]

Originally posted by: Bowfinger

Originally posted by: heartsurgeon
just so i have this right...

everyone admits they're making more money (because the economy sucks).

mexicans are flooding the country and finding work (because the economy sucks)

the DOW is at its highest level EVER (because the economy sucks)

personal home ownership is at an all time high (because the economy sucks)

unemployment is low (because the economy sucks)

inflation is modest (because the economy sucks)

MAN OH MAN, I can't wait for the economy to IMPROVE when the Democrat's take the White House!! I might end up a BILLIONARE!!

by the way

Hey, heart sturgeon -- You promised you wouldn't return

typical lib/lefty/Dem tactic, personal attack and lies....i never "promised i wouldn't return"

Typical heartsurgeon -- doesn't attempt to offer facts or respond to issues raised ... just keeps parroting his partisan Pollyanna propaganda. Oh well, go with your strengths.

Of course he doesn't present any facts or figures. It's because he has none. Just like he probably won't respond to my post with any. Just like how Vic conveniently didn't respond to my posts about how to properly debate (one side presents facts, the other side refutes them with more facts).

You can try to educate these people all day about how to debate but when it comes down to it, you won't be able to. They don't want to listen because they don't have the mental capacity to do so.

 

[Vic]

Originally posted by: WhipperSnapper

The lyrics from the song that Vic quoted are from the rock band Rush. A great song and group, btw.

Yeah, it's Show Don't Tell off the Presto album. I figured it appropriate given all the usual perception twisting going on in this thread. That and I see them on Saturday.

 

[azazyel]

Originally posted by: PingSpike

Originally posted by: Mxylplyx

Originally posted by: Hacp
Over the last 4 years, real wages have stagnated. That is, only 4% of the country has seen any increase in wages. That 4% is the country's elite. The economy might be up, but only 4% are seeing any effects of it.

Odd...mine has tripled. Never knew I was one of the elite.

By your own admission you're working two jobs for a total of 70hrs/wk. I would hope you were getting signifigant compensation for that...since basically all you do is work. No offense meant, I just couldn't live like that myself.

aka work to live don't live to work.

 

[Vic]

Originally posted by: LegendKiller

Originally posted by: Bowfinger

Originally posted by: heartsurgeon
just so i have this right...

everyone admits they're making more money (because the economy sucks).

mexicans are flooding the country and finding work (because the economy sucks)

the DOW is at its highest level EVER (because the economy sucks)

personal home ownership is at an all time high (because the economy sucks)

unemployment is low (because the economy sucks)

inflation is modest (because the economy sucks)

MAN OH MAN, I can't wait for the economy to IMPROVE when the Democrat's take the White House!! I might end up a BILLIONARE!!

by the way

Hey, heart sturgeon -- You promised you wouldn't return

typical lib/lefty/Dem tactic, personal attack and lies....i never "promised i wouldn't return"

Typical heartsurgeon -- doesn't attempt to offer facts or respond to issues raised ... just keeps parroting his partisan Pollyanna propaganda. Oh well, go with your strengths.

Of course he doesn't present any facts or figures. It's because he has none. Just like he probably won't respond to my post with any. Just like how Vic conveniently didn't respond to my posts about how to properly debate (one side presents facts, the other side refutes them with more facts).

You can try to educate these people all day about how to debate but when it comes down to it, you won't be able to. They don't want to listen because they don't have the mental capacity to do so.

You mean I don't respond your usual vitriol, personal attacks, and statistics twisting that you pretend are "proper debates?" God forbid!! :Q

Let me help you out: that the sun will rise tomorrow is a fact. Your interpretations of data and opinions are NOT.

Keep being a tool though, posting about me behind my back :roll:

 

[PrinceofWands]

Originally posted by: Mxylplyx

Originally posted by: PrinceofWands

Originally posted by: ProfJohn

Originally posted by: PrinceofWands
In my opinion that's one of the biggest factors. The high middle-class and up are doing better than ever, but everyone else is falling through the crapper floor because good jobs are all but gone and everyone is left with barely better than minimum wage service industry work with no benefits.

That is such a bogus excuse.

Did you notice that no one seemed to use that excuse when Clinton was in office and we had the greatest economy ever?
But if you look at the data you will see that by nearly every measure the economy is as good today as it was at any time during the Clinton administration, excluding the tail end of the dot com boom.

Proof:
Race and Hispanic Origin of People by Median Income
Median income for males in 2005 was $31,275 which is higher than all but the last three years of the Clinton Presidency.

Historical Poverty Tables
Poverty rate for all people is 12.6% which is lower than every year of the Clinton Presidency but the last two.
12.6 is also lower than EVERY year from 1980 to 1998.

Homeownership Rates for the U.S.
Home ownership rates for 2006 were between 68.5 and 69%.
In 2000 the rates were between 67.1 and 67.7
In 1990 the rates were between 63.7 and 64.1
If everyone is making minimum wage how come home ownership is near it's highest level ever?

I don't know what clinton has to do with anything. This shift to service industry has been going for decades now...since before clinton. The only difference was the tech boom that replaced industrial and manufacturing for a short time. Now that it's been offshored it's back to craptastic as usual.

The only way I can see more people being able to afford houses now as opposed to before (especially at the ridiculously inflated prices of real estate today) is that people are able and willing to take on more debt now...and possibly the advent of other mortgage options. But that's only a guess, I have no real idea or data. I only know what I see and read and hear...and that's pretty much unanimously bad, except for persons in management, or upper echelon business types.

If you think the tech boom has been offshored, you are woefully uninformed. Software engineering is one of the most high demand jobs in the country right now. I'm working 2 professional jobs working 70hrs/wk at the moment doing programming work, and there are unfilled positions at every company I know of.

That's a higher end position than what I was talking about. Tech is basically gone, and for years it was a great entry level good paying job more the masses. I'm mostly talking about all the 12.50-20.00/hr jobs that made up the bulk of entry level middle-class living.

 

[LongTimePCUser]

ProfJohn,
Read the numbers you linked to.
Race and Hispanic Origin of People by Median Income

Male, median income adjusted for inflation declined between 2001 and 2005.
Declined. That means less income.


Also, that only adjusts for cost of living inflation. It does not look at the decrease of the value of the benefits that corporate workers have seen in the last 5 years. Reduced pensions and reduced medical insurance benefits.

The real number to look at would be total compensation after tax adjusted for inflation. I don't know where to find those numbers. Do you? Remember also that income tax did not decrease significantly for people whose income was around $30,000 / year.


Male Female
_____________________________ _____________________________
Race, Number Median income Number Median income
Hispanic with ___________________ with ___________________
origin, and income Current 2005 income Current 2005
year (thous.) dollars dollars (thous.) dollars dollars
________________________________________________________________________
ALL RACES

2005 102,986 $31,275 $31,275 104,245 $18,576 $18,576
2004 35/ 101,772 30,516 31,537 103,384 17,667 18,258
2003 100,769 29,931 31,763 102,713 17,259 18,316
2002 99,788 29,238 31,739 102,487 16,812 18,250
2001 98,873 29,101 32,092 101,941 16,614 18,322
2000 30/ 98,504 28,343 32,129 101,704 16,063 18,209
1999 29/ 97,063 27,293 31,971 101,036 15,304 17,927
1998 94,948 26,492 31,686 98,694 14,430 17,259
1997 94,168 25,212 30,579 97,447 13,703 16,620
1996 93,439 23,834 29,525 96,558 12,815 15,875
1995 25/ 92,066 22,562 28,700 96,007 12,130 15,430
1994 24/ 91,254 21,720 28,300 95,147 11,466 14,939
1993 23/ 90,194 21,102 28,073 94,417 11,046 14,695
1992 22/ 90,175 20,455 27,891 93,517 10,714 14,609

Originally posted by: ProfJohn

Originally posted by: PrinceofWands
In my opinion that's one of the biggest factors. The high middle-class and up are doing better than ever, but everyone else is falling through the crapper floor because good jobs are all but gone and everyone is left with barely better than minimum wage service industry work with no benefits.

That is such a bogus excuse.

Did you notice that no one seemed to use that excuse when Clinton was in office and we had the greatest economy ever?
But if you look at the data you will see that by nearly every measure the economy is as good today as it was at any time during the Clinton administration, excluding the tail end of the dot com boom.

Proof:
Race and Hispanic Origin of People by Median Income
Median income for males in 2005 was $31,275 which is higher than all but the last three years of the Clinton Presidency.

Historical Poverty Tables
Poverty rate for all people is 12.6% which is lower than every year of the Clinton Presidency but the last two.
12.6 is also lower than EVERY year from 1980 to 1998.

Homeownership Rates for the U.S.
Home ownership rates for 2006 were between 68.5 and 69%.
In 2000 the rates were between 67.1 and 67.7
In 1990 the rates were between 63.7 and 64.1
If everyone is making minimum wage how come home ownership is near it's highest level ever?

 

[FoBoT]

I am 'up' on the economy, I have a great job with good long term career potential and am making more money than I would have ever guessed ten years ago.

 

[Jhhnn]

Such a shill, HS. I remember when you were leaving and never coming back. Did the pay rate improve, or what?

According to you, the tame conservative media of rightwing thinktank echoes isn't just liberal anymore, it's "leftist", perhaps one of the most dishonest ploys ever employed by the Right.

Middle class people are uneasy because it's increasingly difficult to maintain that status, while those at the very top have it made- you just said so yourself. The fiscal situations of the middle are increasingly based on debt rather than assets. Anybody can look good for awhile on borrowed money, but those appearances are deceptive. Witness the negative savings rate and the fact that many Americans are two paychecks away from financial ruin...

Not to mention that much of the "growth" over the last several years is based on the refi routine in a real estate bubble and low interest rates... asset liquidation to achieve cash in hand...

As has been discussed in recent threads, the purchasing power of the median wage has declined over the years, as well, even as top incomes have exploded...

 

[theeedude]

I don't think Americans really worry about the economy anyways. Most Americans and our government seem to want to spend any dollar they can get their hands on or borrow.
So it's not like Americans' spending is limited by our predictions of the economy. Just limited by our credit lines.

 

[umbrella39]

Originally posted by: heartsurgeon
It's all about the leftist media trying to make Bush look bad......

I give a every time someone says something like "leftist media". You are in good company so don't feel special or anything.

 

[PingSpike]

Originally posted by: PrinceofWands
That's a higher end position than what I was talking about. Tech is basically gone, and for years it was a great entry level good paying job more the masses. I'm mostly talking about all the 12.50-20.00/hr jobs that made up the bulk of entry level middle-class living.

This is what gets me. They say there is a "shortage of skilled people"...I have to ask....where are the entry level positions? I see a fair amount of jobs looking for people with at least 3-5 years experience but virtually no entry level around here. I think they have outsourced all of the entry level jobs they can...and now they're surprised that there's no one around with 3-5 years experience. Around here the problem is simply that there is mostly small businesses, which of course don't usually have the resources to train entry level people.

You can dump as many people into tech degree programs as you want though, if there aren't any entry level positions out there they'll just go into other fields afterwards and you still won't create any more middle level people.

 

[1EZduzit]

Originally posted by: heartsurgeon
It's all about the leftist media trying to make Bush look bad......

LMAO, like they need to "try" to make Bush look badt!!!! :laugh:

 

[imported_Lothar]

The economy is being propped up by expensive debt and companies doing share buybacks to artificially inflate their stock price rather than investing those earnings into their research/manufacturing departments.

Anyone with an ounce of economic sense knows that Dow/Nasdaq/S&P500 setting all-time records doesnt automatically mean good economy.

 

[jackace]

The number one reason Americans as a whole are down on society is after adjusting for inflation the median income for Americans is down, the cost of housing are up, most other costs are up, and more Americans are losing ground instead of gaining ground. Job security is not an option any longer, but at the same time starting a business is become more difficult. (costs involved and paper work required) All these macro economic situations lead to the average American feeling apprehensive about the future.

If you do research into the statistics only top percent of Americans are actually getting ahead. The rest are loosing ground compared to 30 years ago. Rich getting richer and poor getting poorer. If you have a very innovative idea and you can find funding to start a business you have a real shot at breaking out of being poor, but the chances of failure at that business are 65-70%. (general number not industry specific)

 

[ProfJohn]

I think a lot of opinions on the economy are based on the ?I?m doing fine, but I worry about my friend down the street.?

This effect even shows up in polls.
When asked how they feel the overall economy is doing you?ll end up with X saying it is good.
Then when you ask people how they are doing personally you end up with a much higher percentage saying that they are doing good.

I think it is all based on what they hear on the news. And for months if not years we have been hearing about the up coming slow down in the economy etc etc.
Hell? every time we post a thread about the continuing growth in tax revenue a dozen people chime in with the ?we can?t keep up this type of growth forever? type of comments.

Face it? the economy is doing quite well. We all thought the housing market crash would lead to a slow down or even recession but we are starting to see signs that we have gone past that crisis and are starting to re-emerge into growth again.

 

[Hacp]

Originally posted by: ProfJohn
I think a lot of opinions on the economy are based on the ?I?m doing fine, but I worry about my friend down the street.?

This effect even shows up in polls.
When asked how they feel the overall economy is doing you?ll end up with X saying it is good.
Then when you ask people how they are doing personally you end up with a much higher percentage saying that they are doing good.

I think it is all based on what they hear on the news. And for months if not years we have been hearing about the up coming slow down in the economy etc etc.
Hell? every time we post a thread about the continuing growth in tax revenue a dozen people chime in with the ?we can?t keep up this type of growth forever? type of comments.

Face it? the economy is doing quite well. We all thought the housing market crash would lead to a slow down or even recession but we are starting to see signs that we have gone past that crisis and are starting to re-emerge into growth again.

I was listening to Cspan radio on the 18th and it had Ben Bernarke speaking with house members about the 2007 mid-year report, and one of the representatives kept pushing numbers like only 4% of the nation saw any increase in real wages in the last 3-4 years, and the rich/poor divide has been the highest in decades. He mentioned that the information was gained from a study by a Bush Appointee.

 

[simondedalus]

simple man ...because all americans are not a economic professor

 

[Blain]

- Hold on... we're goin' for a ride -
* 2008 Election = Anyone in White House reducing troop deployment
* Troops returning to work = Swelling workforce numbers
* War machine consumes less = Slow down

As a whole, does the US economy get a net gain or net loss from "Peace"?

 

[rchiu]

Originally posted by: LegendKiller
Why is this economy not great?


Lets start here...

Just when we should be getting *more* home equity, since our houses are appreciating at breakneck paces, we are actually getting less. Why? Because we are fueling our consumption, and economy, by cashing out of those equity positions. This pace will only increase as boomers sell larger houses, which they have used as piggy banks for their nest eggs, to fund their retirement.

http://calculatedrisk.blogspot...centage-homeowner.html

Interestingly enough, you can see the effects of Mean Equity Withdraw here.

http://photos1.blogger.com/hel...640/GDPMEWQ22006.1.jpg

This shows that GDP didn't really grow because we created wealth. It grew because we took wealth from other areas and put it into consumption, fueling GDP.

http://photos1.blogger.com/hel.../640/REmortgageGDP.jpg

Here we see that mortgages are increasing, in line with MEW and equity withdraws.

If we look at the Case-Shiller index we see that housing prices are declining, even Chicago and NYC is declining. As of March-07

Phoenix -4.64%
LA: -3.42%
San Diego: -6.81%
San Fran: -3.33%
Denver: -4.33%
Washington: -5.62%
Miami: -1.42%
Tampa: -4.83%
Atlanta: -1.48%
Chicago: -.93%
Boston: -7.63%
Detroit: -9.05%
Minneapolis: -3.25%
Charlotte: 0%
Vegas: -2.65%
Dallas: -1.77%
Seattle: 0%
Composite: -2.98%


So, pretty much every area in the country is heading down. Wiping out millions in home equity, creating negative mortgages. Defaults, delinquencies, and foreclosures are on the raise everywhere.

Now lets look at the stock market by starting here.

http://www.fxstreet.com/rates-charts/usdollar-index

The dollar is falling. That means that US corporations that translate their profits back to USD get *more* profit. However, they didn't produce anything more. They didn't create more goods. They weren't more profitable. It's all because the falling dollar.

Now lets look at inflation. Of course the Fed's number excludes certain items, such as energy and food. This is because it's too volatile, however, it doesn't really reflect was Joe6pack is feeling in actual life. 4 months ago a gallon of skim milk cost 3.19 at the supermarket across the street in manhattan. Now, it costs 4.19. Why the sudden increase? Just because of ethanol? Does it really matter? Produce is more expensive, cheese is more expensive, everything is more expensive. CPI is running at ~5.2%, twice the headline "core" measurements. That's also higher than traditional rates, we are easily outstripping the historical average rate.

Of course, they claim this doesn't matter and, I agree, it shouldn't be used to set monetary policy, however, it's a very valid concern to people considering their wages aren't increasing nearly as fast and their disposable income is declining quickly.

Here are some further pieces of information

http://www.epinet.org/content.cfm/pm110

Indebtedness has increased 42% in the last 5 years
Debt/income is now at 120% of after-tax income, twice the level 30 years ago
Debt/service ratio is at an all time high of 13.9%
Personal savings rate in Q1 07 was -1%, despite having record level of bonses
The US only has 1.9% more jobs today than it did Mar 01
More than 3m manufacturing jobs lost since 2000


Sure, you could claim that the economy is doing well, but it isn't. The stock market increases are a function of the falling dollar and the effect of massive private-equity buyouts, LBOs (which i-banks are having increasing problem of unloading). All of the stocks that are being rebought by PE or LBO has to go back onto the market. That means that there is more money chasing fewer stocks, equating to higher prices.

I really don't expect things to really hit the fan until December or so. That's when the largest bulk of ARMs reset, consumer credit will be all but tapped out, and energy costs will have risen enough that it'll squeeze consumers every way. You'll see a lot of things pop somewhere around Jan-Feb timeframe. This will take a center stage in the debates running up to the election.

All debt is is taking money from the future and pulling it back into the present, while paying somebody for that luxury. We have fueled our wealth, consumption, and economic growth not with increased wealth, but through debt. Our credit cards are all but tapped out at this point and it's about time we had to pay the pied piper. We have to pay for the growth we got from debt at some point, whether that's now or later is the question. I suspect it isn't too far from now.

Totally agree. Stock market is not a true indicator on how the economy is doing. The Wall St. is awashed in money because of all the M&A activities. All the investment bankers are getting like 100% bonus. All those activities are nothing but creating money out of thin air, well mostly, not to mention all the debt and leverage people use to fuel those activities that add to the profits of Wall St.. Lot of talks on synergies and value creations after M&A and LBO but you rarely see those things realized. With all the speculations on M&A and other activities, that's why the stock market is high right now.

What's happening is that people in certain sector are benefiting from those activities right now. But the rest of America have to deal with slowing house market and broken sub-prime leading system and the problems that comes with it.

Not saying the economy is really bad, but the stock market is definitely not an indicator of how the economy is doing.

 

[WhipperSnapper]

The stock market might not indicate how well working Americans are doing. Might it be possible for stocks to increase in value if the owners of the stocks are able to take a larger share of the employer's contribution to the wealth produced by the business. In other words--might a rising stock market also be evidence of lower wages or stagnant wages for workers but higher profits for the businesses?

 

[piasabird]

If you look at the stock market and that is making more money than ever that is a good indication that corporations are making lots of money, but there are other factors in the economy you need to look at.

1. Inflation in the Home owners market of the price of housing.
2. Foreclosures on Homes.
3. Inflation of the price of electricity.
4. Inflation of the price of automobiles.
5. Inflation of the price of Goceries.
6. Inflation of the price of Gasoline.

All of these effect the real cost of living. However, they may or may not effect the stock market.

I have one addittional take on this subject. If this personal income group goes up higher, then the businesses like Oil Companies, and Electric companies make more money for the same amount of customers. This causes them to make more money and causes more taxes to be collected if they are based on % of cost of an item. This will make it appear that the corporations that sell these products are doing well and making record profits. However, they are not a good indicator that the average joe's wallet has more money in it. If you want to give this index a name call it the Wallet Index!

If your savings are invested in the Stock Market this may be good news. However, if you can barely make ends meet and can not save much money then this is bad news.