The Economy Shrinking? White House And Millenials OK With That?

You know things are truly wrong when the Onion publishes something and the article seem almost reasonable.

WASHINGTON—A report released Tuesday by the Pew Research Center found that after more than four years of financial hardship, a majority of Americans now feel more at ease living in a failing economy than they would in a thriving one.

The report concluded that the constant threat of a second recession, record joblessness, ever-rising health care costs, and a soaring national debt, while devastating, have come to be the only things citizens know they can truly count on in these bleak and unstable times.

“To be honest, without the specter of defaulting on my mortgage looming over my head, something would just feel off,” said Louisville, KY resident Dale Bowman, one of thousands polled for the study. “Call me a creature of habit, but I’m just accustomed to waking up knowing our unemployment rate is over 9 percent, there’s nothing I can do about it, and it’ll be a very long time before we can ever hope to pull out of this.”

A majority of survey respondents preferred to coast comfortably along through a failed financial system.

“Even if I did somehow make enough money to keep my head above water, I haven’t the slightest clue what I’d do with it anymore,” Bowman added.

According to the survey, 63 percent of Americans said they had come to rely upon the familiar sense of dread that came from knowing the country was quickly losing its place as an economic superpower, while 71 percent described finding a kind of tranquility in the steady, predictable cuts to local, state, and federal funding.

In addition, 80 percent reported they had been tightening their belts for so long, the thought of loosening them again after all this time just felt unnatural.

“You get used to sending 50 resumés into the void each day and having them all go unanswered,” said Mary-Lee Jones, 46, of Cleveland, who later called the enduring unlikelihood of ever finding employment “her rock.” “The emotional trauma of not knowing if or when I’ll work again has just become a regular part of my life. Honestly, not living on the knife’s edge of poverty might make me a little anxious.”

The report also found that many take comfort in the dependable stream of ominous fiscal predictions in the media, particularly in seeing, on a regular basis, the weary face of Federal Reserve Chairman Ben Bernanke on the cover of major newspapers, accompanied by giant bold letters announcing the dollar’s latest slide.

“Even if the economy did start to make a miraculous recovery, all that would happen is I’d get my hopes up and then, boom, it would collapse again like it always does,” Phoenix-area carpet salesman Mike Nicolette said. “At least now I’m fully aware that the shitty hand I’ve been dealt isn’t going to change for a while. It’s something I can count on, you know?”

“My children have never seen America in good financial times,” Nicolette added. “An upswing now would probably just confuse them, frankly.”

Faced not only with temporary hardship but also the possibility of a fundamentally broken economic system, Stan McGrath of Houston told reporters he was beginning to think long-term.

“A lifetime of barely getting by would be something stable, at least,” said McGrath, a 38-year-old Wal-Mart cashier. “If nothing else, I wouldn’t have to keep myself up at night worrying about whether the American dream had totally abandoned me.”

It’s a testimony to how bad things are that this was anything other than satire.  The fact though, is that the economy hasn’t “recovered” since 2008.  All things considered, that doesn’t look like it’s going to be changing any time soon. Here’s the cover story on the WSJ’s front page recently.

It’s the story that the media is turning a blind eye to in it’s rush to get all the juicy details about a thirty year old blackmailing case of a ousted Congressional leader who hasn’t been in office for years.  Or the whatever fake news story about Donald Trump is the story of the week. Those are apparently the stories that the media feels are what  the people need to hear about this week.  Who cares about all that economic stuff anyway? Things are going great, we had a Democrat in the White House. I suspect that if Mitt had won the election the media might be paying just a bit more attention to the economic train wreck we are living in. They saved that for the Saturday papers.

It’s occurred to me that the kids graduating from college today have probably never seen a truly great growth economy.  Realistically, the growth economy of the Eighties and Nineties ended in the late 1990’s with the .com bust and that was most likely when they were infants.  Rush was talking about how the Millenials don’t seem to want the house and the car that we, in previous generations accepted as the basic goals in life.

I think that this is probably a case of the young people having smaller goals because they don’t believe that larger ones are possible.  After all the defining statements of the people in school, the media and other presumably other trustworthy places are “you didn’t build that” and “unless we cut back we’re all going to die.”  How could you ever think about building a true life in a world where, if you do that, it will only be at the expense of destroying everything.

Rush was also complaining that the Millennials don’t seem be blaming Democrats for anything that’s being done to them.  Of course not.  Everything they see is saying the Democrats are great.  Every person they have contact with in authority is more than likely a Democrat.  This is the first generation that by and large got to adulthood without having a to work at some sort of part time job.  They’ve not yet had the experience with the working world.

So by the time they leave high school they have no idea what’s about to happen to them.  And the people they trust in media, government and other authorities aren’t going to tell them.  The Colbert Report is considered a major news source by many Millennials and  I don’t think Colbert covers the fact that the jobs situation is absolute crap.  Or many of the other things that this blog, for instance covers.

Add to that the constant drumbeat of doom that the media and government puts out.  If you listen to the warmists like Nye and Tyson, they would have you believe that the choices are dramatically shrunk standard of living or the end of the world.  And the kids have heard nothing else for their entire lives.

And it’s only going to get worse unless something changes.

Burdened with an obligation to pay government debt they did not incur, young Americans – those born between the early 1980s and the beginning of the 21stcentury, or millennials – begin life at least partially robbed of their birthright.

This is the first generation of young Americans that our government systemically disfavors and the first generation whose prospects are lower than those of their parents.

Their parents and grandparents, beneficiaries of the New Deal and Great Society programs that are bankrupting America, never intended this. They are deeply concerned that their children and grandchildren cannot find jobs and are facing a future of decreased opportunity. They never anticipated their comforts would come at the expense of their progeny.

What can be done to create a system that’s more fair and sustainable?

Mary Parrilli, now in her twenties and living outside of Chicago, told us, “I am outraged. We have been scammed, end of story. I do not expect to get back any of the money I am paying into Social Security – to me, it’s just another tax. I think people should help the elderly, especially their own family, but it is immoral for the government to force this on us. This is a perfect example of punishing the young and the successful and rewarding the irresponsible.”

Increasingly devastating fiscal conditions are being handed to our nation’s youth. Every Social Security and Medicare Trustees Report and every Budget Outlook from the nonpartisan Congressional Budget Office shows fiscal deficits far into the future. These deficits drive the national debt even higher and someday the bill will come due. Only substantial tax increases or spending cuts will solve the problem – and judging by the current political climate, these aren’t coming any time soon.

Because of automatic entitlement spending, Congress is unable to balance the budget without taking direct action to rein in the growth of these programs. To make matters worse, spending in 2009 was $3.5 trillion and revenue was $2.1 trillion, leaving a deficit of $1.4 trillion. Seven years from now, the deficit is expected to surpass $1 trillion again and continue rising after that. This will leave debt held by the public at more than 79 percent of GDP in 2024, compared with about 73 percent now.

Of course it doesn’t help that any potential solutions that involve shrinking government are met with a torrent of smears and disparagement.  That doesn’t change the fact that government is the problem and needs to be contained. Unless it is, the problems will only get worse as the government continues to restrain growth on the one hand and grow itself on the other. The problem is that that makes everything else, especially trying to start a life, more costly and more than likely beyond the means of almost everybody.

How many years would it take first-time homebuyers, earning a median household income, to save enough money for the standard 20% down payment on a median home? Are you sitting down?

An impossibly long time in many cities, Lindsay David of LF Economics (and a contributor on WOLF STREET) found in his report on mortgage stress. He looked at 30 large US cities, using their local median incomes and median home prices. It assumed that young households could accomplish the tough feat of saving 5% of their income, year after year, through bouts of unemployment, illness, shopping sprees, family expansions, or extended vacations.

The results are stunning – if just a tad discouraging for first-time buyers.

In my beloved and crazy boom-and-bust town of San Francisco, where a median home (for example, a two-bedroom no-view apartment in a so-so neighborhood) costs $1 million, it would take – are you ready? – 37 effing years.

In all too many real ways the Millennials are being shortchanged and they don’t have the knowledge and education to understand why.  For decades now the establishment has done everything in their power to deny the later generations the tools to understand how the world works.  Add to that the rules based and tightly bound culture of the blue model and how can anybody under the age of thirty even begin to guess what’s coming. Coming it is whether we like it or not.

“The government’s revised estimate for last quarter was weaker than its initial estimate –” Here it is, 0.2%, that’s what they originally reported, 0.2%.  Obama’s out there hailing economic growth at the same time.  Obama’s out there lauding it, applauding it, and how great the economy’s just chugging along, and everybody knows it was BS.  You can see, I mean, those of us of a certain age we’ve been alive long enough to know when an economy is really growing, when it’s really percolating, when it’s really humming.

There’s an associated uptick in mood when that happens, and of course there isn’t any perception or actual economic growth going on.  It is contracting.  It’s shrinking.  And there is a complementary mood, which is down in the dumps, depressed, 93 million Americans not working.  I don’t know how in the world anybody can talk about economic growth when you got 93 million Americans it is not working.

So, anyway, we’re contracting now.  But it’s not a big deal.  It’s just the weather.  All the Drive-Bys are saying it’s not anything to worry about. It really isn’t, it’s just the weather, it’s climate change, and of course a little problem with the trade deficit in the first quarter. But no big deal. “Steady gains in employment are expected to fuel healthy growth for the rest of this year.”  It’s what it says right here in the third paragraph, after reporting we contracted at nearly 1%.  Don’t sweat it, gang.

“Steady job gains are expected to fuel modestly healthy growth for the rest of 2015. The harsh winter, which kept many consumers home and businesses closed, and a labor dispute that slowed trade at West Coast ports are both over.” Again, they insult our intelligence.  Here’s the truth of the matter, and you find it in the Washington Post: “Americans are starting fewer businesses, new companies are going out of business more quickly, and the new firms that do get off the ground are creating fewer jobs. None of that bodes very well for an economy still trying to find its footing.

In other words, more businesses are closing than starting.  And this, just to remind you, this is not a story from today.  This is a story from September 17th, 2014.  I just wanted to remind you, September 17th, last year, Americans are starting fewer businesses, new companies are going out of business more quickly, and the new firms that do get off the ground are creating fewer jobs.

What’s strange is that all too many people are willing to accept the fact that the economy is contracting as the new normal.

This Theory Explains Why the U.S. Economy Might Never Get Better

One thing that happens as you get older is that you get a sense of Been There, Done That. I remember the same sort of thing back in the 1970’s when it was called malaise.  We got out of that then and if we do the right things now we can do it again.  If people would just stop talking about how bad it is that anybody gets rich and make it possible to actually create wealth again, then we can turn things back around. If we don’t, it’s not going to end well.


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