Higher Wages or Bubblenomics?


darkbeaver
#1
Higher Wages or Bubblenomics:
What's it gonna be?

By Mike Whitney

December 22, 2008 " Information Clearinghouse " -- - -Wages, wages, wages. It all gets down to wages.

A strong economy must be built on a solid foundation of steadily rising wages. If wages don't keep pace with production, the only way the economy can grow is through the expansion of debt, which leads to disaster.

Consider this: the US economy is 72 percent consumer spending. That means the Gross Domestic Product (GDP) cannot grow if salaries don't keep up with the price of living. Low Income Families (LOF)--that is, any couple making less than $80,000--represent 50 percent of all consumer spending. These LOF's spend everything they earn just to maintain their present standard of living. So, how can these families help to grow the economy if they're already spending every last farthing they earn?

They can't! Which is why wages have to go up. The cost to short-term profits is miniscule compared to the turmoil of a deep recession which is what the world is facing right now. The present crisis could have been avoided if there was a better balance between management and labor. But the unions are weak, so salaries have languished while Wall Street has grown more powerful, stretching its tentacles into the government and spreading its anti-labor dogma wherever it goes.

The investor class has rejiggered the system to meet their particular needs. Financial wizardry has replaced factories, capital formation and hard assets while re
 
JLM
#2
"A strong economy must be built on a solid foundation of steadily rising wages"- We've been doing that since the 1940s and where has it gotten us? There's more poor families to day than there were then. What we have to try doing is getting more spending mileage out of what we have and doing things like packing a lunch instead of stopping at McDonalds (which only contributes to higher health costs from feeding people junk). Buying new vehicles is generally a big waste of money, as soon as it's driven off the lots it's losing $2000 or $3000 in value, but a vehicle 2 or 3 years old and let some other sucker pay for the depreciation. Before heading out to the grocery store check the flyers for whats on sale and then buy lots of if it keeps for awhile. This inflation is just a sickness, earn more so we can spend more on junk that is worth less. This economic down turn may be the best thing that happened since WW2- prices will come back down to a sane level.
 
darkbeaver
#3
Quote: Originally Posted by JLM View Post

"A strong economy must be built on a solid foundation of steadily rising wages"- We've been doing that since the 1940s and where has it gotten us? There's more poor families to day than there were then. What we have to try doing is getting more spending mileage out of what we have and doing things like packing a lunch instead of stopping at McDonalds (which only contributes to higher health costs from feeding people junk). Buying new vehicles is generally a big waste of money, as soon as it's driven off the lots it's losing $2000 or $3000 in value, but a vehicle 2 or 3 years old and let some other sucker pay for the depreciation. Before heading out to the grocery store check the flyers for whats on sale and then buy lots of if it keeps for awhile. This inflation is just a sickness, earn more so we can spend more on junk that is worth less. This economic down turn may be the best thing that happened since WW2- prices will come back down to a sane level.

Real income hasn't increased since the early 70s.
 
JLM
#4
Quote: Originally Posted by darkbeaver View Post

Real income hasn't increased since the early 70s.

That's what I was trying to get at, we are just in a vicious circle up goes wages up goes prices or vice versa.
 

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