America Descending 

        There's apprehension stalking the land - - an uneasiness among the people.   It's not just the wheelers and dealers in the financial centers who are seeing their balance sheets fall out of balance. The vast army of the middle class is suddenly feeling less affluent.  My bride among them.

        "Can you believe this?" she exclaimed.  "I pumped barely more than twelve gallons of gas and it cost me forty dollars!  That's outrageous!"

        I should explain that my wife uses diesel fuel and the price is slightly higher than standard gasoline right now because it's the same grade as home heating fuel, which is in heavy demand.  Last summer she was pleased to report that diesel was slightly less than gasoline. The ancient law of supply and demand at work. 

       She is also disturbed by the steady increase of prices in the grocery stores.  When prices aren't rising often the quantity in a package is smaller.  One way or another she feels she's getting less for her money these days.  This is causing her to feel less affluent and she is cutting back sharply on her plans to aid Santa at Christmas.  It may help account for the anemic 0.2 per cent increase in retail sales in October.  Retailers are said to be hiring less extra help and not stocking merchandize quite as heavily as previous years.  This is not a good omen. 

      A slowdown in consumerism is not what the economy needs.  It may be precisely what prudent consumers need to get their financial affairs into better balance, but consumer buying accounts for almost two-thirds of the Gross Domestic Product and if the GDP dips too low it spells economic recession.  

      The real estate bubble has not finished its implosion and the $915 billion credit card bubble is bursting.  The big banks were asking for it, showering the nation with credit cards whether the lucky recipients could manage them or not.  The reality of the debt load is only now beginning to hit home and the misery index among the over-extended middle class is climbing. People are toying with the idea of saving a few dollars in case of trouble ahead.  However, the 401(k) is a backstop, isn't it?

     "What about this 401(k)?" asked my prudent bride. "The balance looks puny!  It would have been a lot of money when we were younger, but it won't last but a couple of years even in one of those medium-priced retirement homes."   She's right.  Inflation is stealing from the value of billions of dollars worth of 401(k)s and IRAs.  A nest-egg of, say, $100,000.00 won't go far when the retiree must pay $8.00 for a gallon of gasoline and $50.00 for a haircut, not to mention $1,000.00 a week for room and board in an old folks home. 

     "Well, what shall we do," asked my lady, "go hide in a cave somewhere like those Russians did to wait for the end of the world?"  She was kidding, of course.  It's true that a Christian sect in Russia expects the end is nigh and holed up in a remote cave, but what we middle class people in the U.S. are dealing with is not the end of the world but merely an economic correction brought about by years of extravagance and reckless use of debt.  It'll force a lot of people to live within their means while market forces untangle the debt web.  After that we'll probably start the game all over again.  

    So, relax.  Watch a comedy on TV and laugh a little.  We laughed a lot during the Great Depression of the 1930s and there's no reason to be all that gloomy just because we're heading into a little recession.  

November 16, 2007.

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Just Plain Stealing?
A thing to fear
Unstuffing a Lifetime
Heavenly Sex
FDR & History
The Chicken Little Convention   
Mr. Bolton's Predators
And Lead us not into temptation
My Obituary
The Legislature and Embryos
Ac-cent-tchu-ate the Positive
What Fools, We Mortals
Unvarnished Truth
End-of-everything Blues
My Immigrant Relative
The Eloquent Pogo
Nesta's Complaint
Unionize School Children
Hucksterism Gone Wild
Unmanageable Religious Violence