Sunday, October 19, 2008
It seems this tiny planet has been placed in the grip of some schizophrenic hell-bent on sending everyone home from work. Corporations cry out about the consumer's refusal to spend money on their products, all while sending million of their employees home with their final paycheck.
If you fire your employees how can you possibly expect them to be willing to spend any money?
State and national governments are cutting spending on all programs, except those efforts designed to bail out billionaire bankers. Many states are dismissing employees or planning multi-week unpaid furloughs for staff.
Giving people less pay to spend is a sure-fire way to shut down an economy.
The bankers have decided to stop giving people new loans for cars and houses. They are afraid that people will not be able to pay these loans back in the months ahead as consumer spending drops even more.
IF YOU STOP PEOPLE FROM BUYING CARS AND HOUSES OF COURSE THEY WILL STOP SPENDING!
How can Sarah spend any money if she cannot buy a car to cart her purchases home? Where is Joe going to put his new purchases if he cannot buy a bigger home?
The death spiral of layoffs, cutbacks, and reductions threatens to send everyone home to do nothing except watch TV and eat. That is certain to lead to more cases of obesity along with associated heart disease, diabetes, and hypertension. Those sick people will then need to see a doctor, just about the time their Cobra health insurance benefits cease.
Governments will be straddled with millions of sick people collecting welfare or state health benefits. The sick contribute only to the health care industry and not much there if they are too poor to pay their doctor's bills.
At just about the time bureaucrats and business managers realize their policies have created landscapes filled with cripples they will announce back-to-work schemes modeled after FDR's Works Progress Administration (WPA). Everyone will be offered jobs building roads, bridges, dams, and new opera houses. A few artists may even get jobs painting or photographing the unemployed.
All this seems like a mad rush to make everyone so sick they cannot work, even if there are jobs available. This schizophrenia runs wild in the boardrooms and in the halls of legislature while the common man sits smoking his last cigarette and drinking one final beer before going home. There is no sense to public or private policies today and everyone knows it.