Wednesday, August 03, 2011

Two Economies

I have often wondered why the experts tell us that the recession was over in 2009 and now warn us of a possible second one. Obviously with unemployment hovering at just below 10% food stamp recipients at an all time high and unemployment benefits running out, the recession isn't over.

It finally occurred to me that what the experts are referring to is the Wall Street economy.By their reckoning, if the stock market is healthy, then so is the economy. So what we have is a classical double standard.

One economy prospers with cheaper goods made off shore by inexpensive labor. Stocks are healthy and dividends are as well. Those that have retirement funds like 401K, and other like types of investments are doing just fine.

On the other hand, the bulk of our population that doesn't live on investment income is suffering. Homelessness is on the increase, foreclosures are still high and with the large inventory of either new homes unsold or bank owned, are causing the real estate market to stay flat.

The construction industry, that fostered a huge amount of employment for the workers in their 20's and 30's is dead. Manufacturing is at a low point due to consumers not having the income to purchase goods made in the Orient. The experts that do not take into consideration the state of the consumer economy are now warning that a second recession is possible. It ain't. It is still the first one.

What we have is Wall Street versus Main Street. It would appear that Free trade isn't all that free.


smokewon said...

Eloquent. Capitalism isn't dead, just reinventing itself. Taking the hog to slaughter once again. I would like to add just one thing: the rife political division used to set us up (and make us sleepy to the situation you so adequately describe).

Bay Views said...

Yes indeed, Smokewon. Capitalism will always triumph because that is simply the source of our wealth. The shift to free trade though, has dislocated our entire economy, and as advertised, what goes around, comes around. Now, suddenly, we don't have that healthy service economy that the liberals have suggested is healthy. What we need are some protective tarrifs that target China and others that ship dumped goods onto us for our hard currency, which is gettin softer. In free trade, we must get an equal amount of trade both directions. With the current policies, failing to hold the feet to the fire of those that are enriching themsleves at our expence. That is the part of free trade I object to. The lack of reciprocity.

Anonymous said...


I really think that this is all a game to undermine the United States. Yes we are all having difficulties with the current economy and oh how about the Wall Street is doing better today Friday than yesterday. I am not sure I believe anything and have seriously considered going back to "post hole" banking.

Norma Jean

Bay Views said...

There's more room under yer mattress< NJ.

Anonymous said...

Hmm, I think I had better leave that comment well enough alone!