Wednesday, April 23, 2008

Get That Hand Out of Your Pocket

It's all your fault, didn't you know that? You bought things.

Actually, I know one of the guilty, a family member who has an MBA from Harvard Business School, and who refinanced his house and bought stocks just when the recession of the 90's happened, recouped gradually and did it again - to travel.

But for the most of us, going into debt happened when we had kids whose futures included going to higher education, health issues arose, jobs were lost, or lately, expenses went up by much greater proportions than our income.

That makes it really offensive that the 139% of income that debt has become is thrown at us as our 'shopping spree'. Samuelson, of course, touts lowering taxes as the way to boom times, although that has proved wrong, and has never shown any remorse for defrauding the worker with lower wages and increased tasks (productivity) who he expects to keep us afloat.

Transfixed by unruly financial markets, we may be missing the year's biggest economic story: the end of the Great American Shopping Spree. For the past quarter-century, Americans have been on an unprecedented consumption binge -- for cars, TVs, longer vacations. The consequences have been profound, and the passage to something different may not be an improvement.

It was the ever-expanding stream of consumer spending that pulled the U.S. economy and, to a lesser extent, the global economy forward (imports satisfied much of Americans' frenzied buying). How big was the consumption pull? In 1980, Americans spent 63 percent of national income (gross domestic product) on consumer goods and services. For the past five years, consumer spending equaled 70 percent of GDP. At today's income levels, the difference amounts to an extra $1 trillion annually of spending.
What can replace feverish consumer spending as a motor of economic growth? Health care, some say. Health spending will surely increase. But its expansion will simply crowd out other forms of consumer and government spending, because it will be paid for with steeper taxes or insurance premiums. Both erode purchasing power. Higher exports are a more plausible possibility; they, however, depend on how healthy the rest of the world economy remains without the crutch of exporting more to the United States.

But what if nothing takes the place of the debt-driven consumption boom? Its sequel is an extended period of lackluster growth and job creation. Somber thought. The ebbing shopping spree may challenge the next president in ways that none of the candidates has yet contemplated.

Remember when George HW couldn't tell interviewers what a gallon of milk cost? This is that detached from reality.

When us DFH's are spending money that we can't see repaying, generally it's because we've been walloped by conditions we can't handle. I suspect that the most part of our debtors are in the same fix.

You knew you'd get the blame, and you know you'll get the bill. When you have to put that food on the family, it costs a lot more than it did this time last year, same-o same-o on the gas in the car, and the insurance if you still have any.

But it was your shopping, see. You bought that graduation present? Shame.

It is this sort of thinking that makes GoPervs cut back on 'entitlements' like social security and throw lots of our money at Halliburton and Blackwater. We might waste it on lunch.


From Yoh There at Ptarmigan Nest, a very profound item.

The ECHR is an interesting court. It is not an appeal court above national or even European institutes, as one might think. It is not part of the European Union, but an institute of the Council of Europe, of which 47 countries are member. It’s goal is to spread democracy and human rights.

The court only adheres to one single “law”, the The European Convention on Human Rights. The convention states ethical and human rights guidelines. Every citizen of the member states can individually appeal on this convention, first at the national courts, but appealing all the way up to the ECHR in Strassbourg (which is located in North-Eastern France). In fact the only defendant is ones own country.

The ECHR has a backlog of about 80.000 cases. A serious restructuring has to be done, but Russia is the only country blocking that. It is believed this is the result of convictions by the ECHR in several cases revolving issues in Chechen (Tsjetsjen).
Reaffirming their profound belief in those fundamental freedoms which are the foundation of justice and peace in the world and are best maintained on the one hand by an effective political democracy and on the other by a common understanding and observance of the human rights upon which they depend;

My hopes are alive, that there will be a fit ending to the era of war criminals in high office in the U.S.

Thanks, my friend (in Holland).

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