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Wednesday, January 25, 2006
Striking It Rich
Things are great, apparently. Every time I look at the news, the economy is good, prosperity abounds, jobs are plentiful, and the stock market is up. I suppose I have to take the President's word for it, since he says it, and keeps saying it. I'll admit, I don't move in the most prestigious circles, but I don't know anyone who is better off financially than they were four or five years ago.
Most of the people I know are doing the same job they've been doing for a few years, and while they may get a lip-service two percent raise (if at all), that doesn't even cover the hike in fuel prices since we invaded Iraq. Lots of people would take better jobs if they existed. I mean, let's face it, if you are trained in a field, and have reached a certain position, it's doubtful you can go across the street to do the same job for another company and expect any type of meaningful boost in pay. Your job pays what it pays, and it's not going to be a great deal more anytime soon, no matter how good you are at it.
But the economy is growing. There are charts and statistics to back it up. So who is prospering? Where is all of this magic happening? Who are the winners? Let's meet these people, and be inspired.
Well, suckers, there are no people.
Who wins? Corporations. Big Business is profiting at record levels, and they aren't doing anything as stupid as rewarding the people whose labor makes it all possible. US companies have the largest cash hoard on hand since the 1920s. Those were good times, sure. As the popular song of the day went, "The rich get richer, the poor get...laid off."
Ain't we got fun?
The 1920s were a wild decade. Bootlegging, flappers, F. Scott Fitzgerald. If you had money, it was high times, indeed. Everything was going really well, and when things are good for the privileged few, everyone knows that those times never end. No one knows what happened in the 30s. That was a long time ago, and I'm sure you're better off not thinking about it. Thinking is bad for you, and can make you depressed.
The crossroads we are at now has to do in large part to the housing bubble in this country, made possible not by quickly rising incomes, but instead by record-low interest rates. A frighteningly large percentage of work in this country has to do with houses: Building them, buying them, selling them, fixing them, improving them, not to mention all of the ancillary industries whose solvency depends on these transactions. We are a country that doesn't actually make anything anymore. If it needs to be made, the Chinese do it for us. The problem with making your living in busywork is that when your services are no longer needed, well, you're screwed.
Interest rates are rising now. The housing market is slowing. Americans will not be building new homes in large numbers. If you do construction, you have a problem.
With a slowing housing market, prices rise less quickly, and often fall. Homeowners will not be selling their homes as readily, if there is not as much profit to be turned by the transaction. If you sell homes for a living, you have a problem.
When interest rates rise, unemployment figures often follow suit. When people are nervous about their jobs, they become less likely to buy new carpet, refrigerators or a new roof to put on the homes that they have decided to stay in. I'll bet you know someone whose job has to do with furnishing or fixing homes.
I don't have the answer to prevent the ugliness that is certain to come. Actually, that is not completely true. There is only one way to prevent it, and that is to actively bring about change, which will be, at least in the short term, even more frightening. Cycles come and go, and the only way to stop it, is to break it. It's time to start over.
posted at 10:56 PM
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