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That’s what American workers are asking these days – and they’re not getting any good answers. I say that because the latest figures show wages and salaries are stagnating like never before.
The Labor Department reported this morning that worker pay rose a pathetic 0.2% in the second quarter. Not only was that down from a 0.7% rise in the prior quarter … and far below the 0.6% estimate … but it was also the worst in recorded U.S. history. The department began tracking in 1982.
If you exclude government employees, the news is even worse. Private wages were essentially unchanged – the first time ever that they didn’t rise at least a bit in a given quarter.
Average hourly earnings figures contained in separate monthly reports on the job market have also been disappointing, as I’ve noted before. They were recently up only about 2% year-over-year, far below the robust gains seen in past economic recoveries.
Is the problem lackluster growth in the economy overall, a trend underscored by yesterday’s GDP report?
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| Companies are scrimping on raises for workers. |
Are problems in Europe or China, and the corresponding impact of the rising U.S. dollar, holding us back? That’s one view I’ve talked about and tend to agree with.
Or is it increased regulation, or the higher health-care costs that employers are confronting? Too-free trade with foreign countries? That’s what still more pundits argue.
Regardless of what’s causing wages to stagnate, the effect is to depress consumer spending and economic growth. That, in turn, is one likely reason the market has stalled out so far this year. So until we see some improvement in core wage growth, I plan to continue erring on the side of increased caution with investing strategy – and you may want to do the same.
Now, let me hear from you. Are you seeing your own wages stagnate, and if so, is that a fairly new development? What about your friends and family? Should Washington change policy to improve the outlook, and if so, what specifically do you think would help? Here’s the link to the Money and Markets website where you can add to the discussion.
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Speaking of the economy and the Federal Reserve’s potential responses to it, Reader Frebon said: “The Fed is the problem. Until they get it that ridiculously low interest rates take money out of the hands of seniors and the middle class, who are the only ones who spend it, it limits demand.
“If they want to get the economy moving, raise rates, not lower them. The banks will benefit and won’t have to make their money with riskier plays, and the corporations won’t be able to borrow on the cheap to buy back stock or invest overseas.
“We haven’t had a president who says what he means and means what he says (even though it might not be politically correct) since Reagan. Maybe it is time for Trump.”
Reader Todd S. added this take on why we keep getting underwhelming growth and wage figures:
“The answer lies in what we have done with the American laborer and American consumer. Consumption, the general view goes, drives 70% of the economy, and with literally millions of jobs being moved outside of the country since the early 1990s, that big engine is out of fuel.
“Nearly 1/3 of full-time American workers now annually earn a wage no higher than poverty-level earnings for a small family. 43% of U.S. workers are earning $30,000 a year or less. The workforce participation rate is at a low not seen during the lifetime of many American adults now.
“The people hit hardest by this have also had to bear the dot-com bust, the economic impact of 9/11, and the 2008 housing crash. They are depleted and exhausted, and GDP is not going to show sustained growth until they are restored.”
As for what policies and politicians might make a difference, some weighed in on the latest poll results – and debated whether Donald Trump was a serious option.
Reader Bill said: “In reference to Donald Trump for president, I, for one, would never vote for him. He and/or his companies have filed for bankruptcy numerous times to wipe out their debts. Would he file for Bankruptcy for the U.S.A. also?”
But Reader Donnie S. said in response that “Maybe somebody should have filed an American Chapter 11 bankruptcy many years ago when it was possible, because America has been monetarily, ethically, morally, and spiritually bankrupt for quite a few years.
“Trump has only filed for Chapter 11 bankruptcy, which is a very smart move, to achieve better/favorable financing terms for businesses and individuals. If America had decent and intelligent leaders rather than the curse of the present administration and Congress, we might not be beyond hope as we are presently.”
Still, Reader Brooks cited other reasons for why Trump wouldn’t make a good leader. His view: “Trump is used to buying his way. He is used to being a dictator of all he surveys. I can’t imagine him understanding the concept of dealing with Congress. I can see him offending every other leader on the planet. He is like a loose cannon.”
Thank you for the well-thought-out, well-argued opinions. Clearly, something is wrong in this country when all you’re getting is 2% growth in GDP and 2% growth in wages several years into a supposed economic recovery. And even those targets aren’t being met consistently, as the latest GDP revisions and wage figures show.
So what’s it going to take to get back on track? Is Trump the guy with the best answers? Someone else in the current Republican or Democratic field? I want to hear from you if you haven’t already weighed in, so please make sure you take a few minutes to hit up the website and share.
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Big Oil earnings were disappointing today (not that it should be a surprise to anyone). Profit tanked 52% to $4.19 billion, or $1 a share, at Exxon Mobil (XOM) from $8.78 billion, or $2.05 a share, in the year-earlier period. Earnings slumped thanks to weakness in its exploration and production operations, even as its refining and chemicals businesses performed well.
For its part, Chevron (CVX) reported its worst quarterly profit in 12 years. Earnings slumped to $571 million, or 30 cents per share, from $5.67 billion, or $2.98 per share, in the year-earlier period.
Both companies are slashing spending and firing workers in response – actions that will ultimately contribute to future improvement in the supply/demand balance in the energy markets. So it’s why I have no intention of giving up on the sector, which is as dirt cheap as it’s been in three decades.
LinkedIn Corp. (LNKD) was another earnings loser in the social media business, dropping almost $30 at one point. The problem? Lackluster forward guidance on revenue growth, display ad sales weakness, and concern about its core job networking operations.
It’s official: The 2022 Winter Olympics will be held in Beijing. Of course, it’s not like countries other than China were beating down the door to host them. Its only competitor was Kazakhstan.
So what do you think about the problems befalling Big Oil? The latest meltdown in social media stocks? China’s hosting of yet another Olympics (after the 2008 summer games)? Here’s the link where you can weigh in.
Until next time,
Mike Larson
Mike Larson graduated from Boston University with a B.S. degree in Journalism and a B.A. degree in English in 1998, and went to work for Bankrate.com. There, he learned the mortgage and interest rates markets inside and out. Mike then joined Weiss Research in 2001. He is the editor of Safe Money Report. He is often quoted by the Washington Post, Reuters, Dow Jones Newswires, Orlando Sentinel, Palm Beach Post and Sun-Sentinel, and he has appeared on CNN, Bloomberg Television and CNBC.
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Trump is popular with many, many Americans because he says what they think.
The last election was against government not for the Republicans – they continually get that wrong! Too, the people distrust the media and so Trump is speaking (as is Bernie) to the people. Trump only has been successful making deals with others and those who discount his ability to make deals are very short sighted. American jobs have been sent overseas for years and that affect is telling today. Society is based on low interest and spending by the government. Most Americans realize their government has failed the country.
Lord help us if what he says is what we actually think–if that’s the case it’s already way, way too late!
The problem is the Fed. If they had to abide by GAAP they would be in jail with Bernie. No one in Washington has any sense of fiscal responsibility. They are only interested in getting re-elected. How dare they now classify Social Security as an entitlement. We paid into it and these greedy SOBs even tax it. All this while their pensions are tax free and they can get it after only 2 years employment. Its the American people’s fault. As Jeff Foxworthy says “there’s no cure for stupid”. Keep electing lying thieving weasels like Obama and Hillary and the rest of the incumbents and this will only continue. No growth, no demand and no middle class.
One has to look at worker pay much more closely as it is not decreasing 0.2%. It is complex where 40% of workers’ pay is increasing and at a good rate, the other 60% are getting screwed. You need to go more in dept on this topic……..
But you MUST look at the average–not that 60%!
In my experience, while wages are flat, the costs to the employer are not, particularly when healthcare benefits are provided. In the past five years, the increase in the employer-paid portion of the healthcare premiums represented an 8% increase in employee compensation even though take-home pay remained static or, in some cases, dropped. When it dropped, it was generally due to an increased pension contribution which I view as deferred compensation. Granted, this is within a local government agency and may not reflect what is going on within the larger private sector economy but it does illustrate that the total returns on employment are not as bad as suggested. But it does require that one, at least, have a job.
Raise? I haven’t had a raise in 13 years. Actually I’ve had to endure paycuts about 35% during that time.
In January you recommended buying the “beaten down” energy stocks. Not the best advice for investors. When the Saudis back off, the market may stabilize. It will take some time to work off the stored up reserves. It looks like we are still a year or so away….
But he probably didn’t really mean to buy them right then!! lol.
Fred you have too much time on your hands–please stop commenting.
Washington should just stay out of it.They and the Federal Reserve have already screwed the country so badly we will never recover until DC implodes upon itself, hopefully sooner rather than later.
Do you mean to say that it is not good and reasonable to have near-zero interest rates for six years? How could that possibly distort the economy? lol
Fred you have too much time on your hands–please stop commenting.
My wages have been basically stuck in neutral. Lucky if I get 1% for an increase.
And the main reason:they can get the labor cheaper (in terms of hourly rate) overseas; a lot of our work is being moved overseas. And being we have to monitor (and usually fix) all of the overseas work, our productivity in US is going down (in terms of what we produced ourselves), so we look even worse in the reports that mgmt. looks at. They think the overseas labor pool is great and the US folk are slacking off. And talking with folks from other companies, it doesn’t sound a whole lot different anywhere else.
Mike – I’m sure many of us get annual increases, so it’s very difficult comparing to quarterly results. Based on the last few years – I’ve seen and heard from many friends and family that raises have been scarse. Recently I worked for a company that gave us bonuses that reflected our performance – salaries didn’t change for 5 years. It was difficult managing cashflow when expenses go up, but your salary doesn’t. It’s also frustrating to see EPS going up 8-9% a year, but our salaries only go up 1-3%… No $ for salaries, but plenty for acquisitions. Corporations aren’t engaged to employees like they are to Wall St.
But how else could the CEO justify his (or her) multi-million dollar remuneration? He had to take on more responsibility. and golly whiz those two new executive vice-presidents that came with the acquisitions HAD to have supervision and guidance–oh so demanding just day after day!
RAISE? My income has virtually disappeared along with my capital after 7 years of zero interest rates.
Nothing like a six-year cure for a two-year flu!
Should be obvious to all by now: “Free” trade with mexico and communist china and poverty stricken india force U.S. workers to “compete” with over 3 BILLION people all willing to work for 1/10 or less of what middle class Americans make. This wage problem applies to skilled, unskilled, and professional people. Mexico, china and india combined have to potential to drag EVERY job out of the U.S.
NAFTA allows jobs to “freely” move to mexico, goods made via $2 / hour wages then move “freely” back to the U.S. U.S. tax payers then get to pay border security costs, drug enforcement costs, jobs loss costs to illegals, unemployment payments to tax payers who lose jobs to mexico, prison costs for locking up the bad illegals, etc, etc.
“Free” trade with COMMUNIST china – same. “Compete” with $2 / hour, we are told.
You think a raise is just around the corner? Dream on. Your benefits were cut. Your share of payments are up and rising. Your pension was cut. What’s next? Wages of course. Cut cut cut until it’s all gone!
The hidden effect of the highly publicized new minimum wage of $15/hr. A friend of mine owns a factory manufacturing low end furniture in very high volumes. Business and sales at his retail customers have been very poor for several years and now many of his workers have told him that unless he raises their wages they would rather work at Macdonald’s or Walmart. He has no elasticity to raises his selling prices as his market is already in the dumps. Next step is shutting down and 25-30 employees are out of work altogether.
Wages are reported to be “stagnating” because the measurement tool is flawed and outdated. This is not 1980. Most increases in total pay to employees is coming through incentive plans, stock in some sectors, workplace improvements, perks and goodies – none of which is captured by government statistics. The total cost of employing people has skyrocketed. For example, free food, world class chefs, dogs at work, onsite daycare – all of these have costs but most don’t get classified by accountants as “wages”.
Years ago, the politicians began screwing around with various laws, regulations and policies that would supposedly “improve” things for American companies and workers. One thing all these changes did was to increase costs for American manufacturers. The manufacturers weren’t stupid. They realized if they could no longer compete with foreign companies due to the various restrictions, they could subcontract the work to those foreign companies and import things at a lower cost to resell at a higher profit for their companies. America, which was once the “maker” for the world, became the importer of then world. The American workers lost their jobs and had to find work elsewhere, often selling those imported products that took away their jobs, and at a lower wage.
You can’t really blame the company officials who closed down the American factories. They had the duty to try to improve their company’s bottom lines – and they did. Of course, the politicians who actually cost all those workers their jobs DO blame the companies, and continue to make things tougher for them. It buys them votes, after all.
Quote of Ms. Yellen, “All we need to do to increase employment, increase wages, and in general straighten out the economy, is reduce interest rates. Oh darn we did that didn’t we? What did you say they are now?”
In terms of the debt the answer is fairly simple. Taxes have to adjusted for the high income people (we have consistently been one of them) along with corporate tax reform. Even under Reagan taxes were higher than now. If we want to have a strong infrastructure again along with better paying jobs and that should go together just a least go back to all the Rights hero and reanact the Tax Act of 1086. Finally, don’t cut at the IRS as for every &1 spent it brings back $8 according to one study I read.
If not climate change will have all our kids in Gas Masks in a few generations anyway.
Cars are being designed to use less & eventually zero oil. Emissions are hated & supply/glut increases + Iran. USA was late to the party. It’s hang-over time. Enough reasons why oil’s been a bad bet ? Add deflation into the mix & turn your attention to a more sustainable investment-class such as beaten-down precious metals & its 6,000 year track record for human desire
Oil is the single most important substance in the world, with hundreds of uses. Six billion people are playing catch up. Don’t sell oil short. Today’s low prices guarantee future shortages. I agree, however, that gold and silver are the only things that always have and always will represent true wealth. Just look at who is trying to tell you it doesn’t. Jim
I decided to retire after one year with no raise. As a Federal employee with 25 years of service, money in investments, and no debts, I exercised the power of ‘FU’ money.
That was at the end of 2011. Since then, my investments have grown, my retirement income has grown, and had I stayed working three and a half years later- I would have enjoyed a fabulous 1% raise. Why should I bother?
We have a congress, and state governments that are afraid to pay the freight for domestic programs like roads, and schools. Sorry, but we ARE competing with the world here. If we fail to adequately TAX the populace for the equipment to compete, we deserve the 3rd world status we are aiming squarely toward. Sorry, gang I’ll be dead before this group will turn it around. Neither Trump, nor Clinton has smelled the trail.
All kinds of financial gurus weigh in on the cause of the 1930’s depression. Previous market meltdowns were largely a result of speculation and tight expensive money. However this time a significant part of the economy experienced both high costs and declining income. During the Kaiser War the US farmers were expected to feed Europe. They went deep in debt buying equipment to increase production and their returns were good. It was expected that the European farm economy would take years to recover, but it didn’t, maybe all the gunpowder expended was good for the soil but Europe had bumper crops in the years right after the war. American farmers in debt and prices falling, not good. The demand for farm goods plummeted as did prices. Many farmers added to their income by winter work in the factories making equipment, not big operations. Failures put the small town banks in a bind and they began to go under. That meant less money and demand for basic materials which rippled through the economy. So flat wages even with low inflation reduce the spending power of paychecks which reduces sales which reduces demand which reduces need for products on the store shelves which reduces jobs which reduces demand— well you get the picture, the economy slows down and down and eventually the bottom falls out. High profits are nice but without wage increases at least keeping up the big fat profits disappear. When you have a consumer economy it only works when the consumers have money to spend on goodies beyond necessities.
Stock buybacks are another reason wages haven’t risen. Profits that were created in part from the efforts of the employees are not shared at all with them in the form of a raise that matches the percentage of profit growth. Buying your own stock back in order to raise the price of the stock, because the CEO’s compensation is tied to the price of the stock is one of the dumber ideas that has come out of Wall Street. You are killing the goose that laid the golden egg is employees aren’t paid more than inflation Ours is a consumer economy and without adequate raises, discretionary spending will shrink.
Another consequence of stock buy backs is that there is then insufficient investment into research and development to keep the company ahead of the competion.
in regards to the lackluster consumer spending I think the zirp of the fed has severly curtailed the spending of the retired. Conservative investments are yielding next to nothing so retires are living off their capital and have to be very cautious. Health care costs continue to far exceed the general inflation(deflation) rate especially cost of drugs. It continues to amaze me that the retired haven’t demanded the fed explain why they have decided to throw the elderly ‘under the bus’ so that wall street can live the good life.
The Republicans who are supported by the Wealthiest Industrial Leaders in America are in charge. Who the heck thinks they will look out for the Average American despite all of their lofty promises?!… :(
No one!
I would like to see wages expressed as cost to your employer instead of what you see in your take home pay. When the increased costs to the employer are recognized maybe employees will know what they really make. Employee benefits came in to existence because of wage controls after WWII but employees think benefits are free. They aren’t.
We need some ome who is brave enough to tell the truth and not back down when rediculed. It will be nice to have a president who will. The truth will keep us free!
Mike and America,
I am not an American and so you don’t have to listen but listen you should. I have lived on this earth now for 83 years and “seen it all’, You name it I’ve seen it.
What is wrong with America? Too many things. America was built upon sound and ethical principals but they have all but disappeared from any aspect of American society. The Federal Reserve and Banking system is corrupt. Most Corporations Make no pretence anymore of benefiting anyone except the Directors, Both the Senate and the Congress knowingly ignore the systemic problems of the financial situation which prevail throughout the country. seemingly benefiting from it. The absolutely absurd overall National debt is causing a pending Tsunami which will be horrific and government officials bury their heads in the sand.
Sadly, it seems, most Americans do not have a clue what is happening to the country other than the fact that “things are getting worse”
Is there a solution? Well, if there is, it does not in electing any of the ‘Established ‘ Politicians.
Would Donald Trump be any better? He couldn’t be any worse. At least he tells the truth and does not talk with ‘forked tongue’. It is true that he is somewhat bombastic but, at least he has an intelligent head on his shoulders. One thing is certain you need a new breed of politicians if you wish to regain what made America Great. A breed of politicians who will challenge the Banking Establishment but don’t hold your breath. I wish you luck for goodness knows you will all need it except perhaps the 1%.
A concerned neighbor
I hereby grant you honorary citizenship. It’s a sad day when people on the outside see things more clearly than we do.
Absolute hogwash….. I grew up in Europe and became a Naturalized citizen many years ago…… There is NO country in the world where more people want to cometo than the United States…… This is the Greatest Country in the World!
Our ONLY problem is that we forgot the lessons of the 1920’s and let the Republican Quislings back into government and since 1981 they have been screwing the Average American and spending billions on Propaganda trying to tell us that they have a “better way”…. They, of course, don’t and soon even the most gullible among us will figure it out and America will become Greater than it is now, just as our Grandparents realized in the 1930’s….
Thank you, Mike S. for saying that. I’m not saying our country is the best in the world, because I think there’s lots of ways to look at what makes something the best. But the U.S. has lots going for it. We are a work in progress, changing as the world needs us to. Everyone thinks we are supposed to be perfect all the time. Everyone compares us to the 1950s, as the best our country ever saw. But they don’t think about things we didn’t have back then, like a cure for polio and I like the technology we have today. Change has to happen. And it’s not all about money.
Education,imagination,willing to work for a living instead of vote geting freebies,concern for employer etc,etc,etc. employers concern for the employes welfair,
Things would have never got into this shape. ………
Georg I am 89 and you have expresset all in a way most can understand. To Trump is the preferd candidante. Hope truth is what the margarty prefers. AHMen
Hi Mike
The problem here is inspirational leadership. Our people from all walks of life desperately want to be inspired and in 2016 the fear is we are going to end up with just another politcian. Is there only one JFK in America? We know the joint isn’t working at the moment but there are far too many know nothings trying to tell us how to suck eggs. Surely we can be inspired once more. It’s not Greece or China, it’s ourselves. We need someone honest, who can balance a budget, mixed with old fashion values and restore faith to us all. And please no crap about Dems v’s Republicans. The more we fight among ourselves, the more we will end up with disapointment.
Mike: As you well know the oversupply of oil is due to our successful fracking operations. As you well know Congress prohibits the exportation of oil. This policy must change. Japan is devoid of natural resources, we should begin exporting oil to Japan and Europe as soon as possible. We cannot count on the Saudi’s to reduce production. The Saudi’s feel betrayed by us because we cozied up to Iran. It is obvious that they want to drive our frackers out of business. We cannot allow this to happen. As you know, our fracters have financied these operations with the sale of junk bonds. If these frackers default on their payments, this will be a black swan event! Regards, Robert Calabro.
Correct! People seem to forget that that US oil industry carried the country thru the Great Recession. Plenty of growth and good paying jobs. Exporting would help it recover. Also, any time in the past when I had an opportunity to buy a great company like Chevron when it had a 5 per cent yield I was not sorry. It may take a while but I’m willing to get paid to wait. Jim
RE: low wages and unemployment:
The world and its economy are constantly changing. What worked yesterday will not work tomorrow. Manufacturing jobs, the substance of the 43+ % middle class, have been outsourced and are gone forever. The displaced workers have to re-tool and become more skilled in other high tech jobs. They have to become better and more skilled persons and go to university or job-retool seminars. Available jobs are also being replaced by robot technology…. even computer skilled ones. Do you get the picture?
So forget the labor wages argument. The economy today does not provide jobs to feed the masses. Instead the economy is geared to make money. We need to re-invent the entire economy that somehow serves everyone; a task we don’t have answers for as yet. The new world order is not the answer!
So true!
But we did vote in Clinton. Thank you for NAFTA, Bill ! Apparently America couldn’t see that we were going to lose jobs despite Ross Perot’s statement of the “giant sucking sound”, loss of American jobs leaving the country. I’ll bet our top economists explained how Ricardo’s Theory of Comparative Advantage was going to produce American wealth despite China’s wages being 1/10 of ours. Again our politicians probably got nice big campaign contributions from multinational corporations who wanted wage competition for unions.
We seen an endless stream of political decisions for politicians self interest and nothing for the good of the country. You could say the same thing for top executives.
I think that ebbs and flows with time, though, Walter. We have tons of manufacturing jobs here in central MN and one company is short 1100 workers! Though they don’t pay a ton, they provide excellent health care, which is something many people care about. I think their wages will improve even more soon. My son looked for work in Fargo/Moorhead recently and the opportunities for excellent paying jobs are just unreal. And another friend of mine told me that employers down in the Twin Cities would hire chimps if they knew they could get someone to work! I think the jobs are there, but complicated to get into. Putting the applications into the computer is like dropping it into a deep, dark hole. People need to learn to use job fairs to get a good job and learn how to interview well.
Computers and robots are taking over. When cars and trucks drive themselves there will be no need for truckers. Automation in every industry is mandatory to compete. You have to do things faster and better constantly. The auto industry uses lots of robots. So does Amazon. Robots will build robots, repair robots, and upgrade robots. Robots are willing to work 24 hour days. Robots will not require health care or vacation days or increases in pay. The worker is doomed. There will come a time beyond work…and money and markets and speculation and its coming faster and faster. Play your games with money, your time is limited.
Why not cut ALL funds that go to all other countries? “People” that owe money do not continue to give more and more of their own dollars away to anyone who is unlikely to pay them back. Why should the U.S.? We have our own problems at home now – BIG problems,. For those that we have “loaned” money, we should demand it be paid back and not “forgiven”. We need all that here for OUR infastructure, OUR own people who are living at poverty level. Who knows – with that money being spent IN the U.S. our taxes could be lowered and people wouldn’t be struggling so much!
Why not cut government? Since it was the great enabler of this debt fiasco.
i Disagree with Reader Brooks about “Trump is used to buying his way.”
That is exactly how politicians are working !
pork project swap for pork project !
How obuma care got passed by giving certain states privileges over others to get the vote
How executive order by Prez whoever becomes enforced law , over laws and standards already in place ! [ like dictators ! ]
how politicians take money from entities to vote for others interest instead of the best for the country !
things going wrong in usa
A court system that mandates laws
A crone capitalism
The Fed reserve Bank breaking the constitution
open borders
defending, err destabilizing other parts of the world
lies to the public
pandering for power/money
disregard for personal rights to pursue happiness
mandating rights
etc etc etc
Fortunately for me & my family, and the rest of America …. Donald Trump has about as much of a chance as becoming President as BOZO the clown !!!!!!!!!!
Do you really think Hillary Clinton or Jeb Bush would turn the trick?
Well the one thing that should be said about Trump, the bozo, is that he says what he thinks rather than what he thinks people want to hear.
We’ve let millions of jobs go overseas. We compete with low wage countries. We’ve forced millions of welfare women into low paying jobs, which makes those workers compete with each other for jobs and keeps wages low. Despite their complaints about taxes, most corporations pay very little. CEO’s have no trouble paying themselves astronomical incomes and stock options, while paying their workers peanuts and decimating pension offerings. Yep, capitalism at its best.
We don’t have Free Market Capitalism. We have Corporate Fascism!
Seems like Rand Paul is invisible to most Americans. I think he has the most integrity, guts and experience of any candidate of either party. He is the only one I have seen who has taken effective action to rid this country of some the most egregious banalities ever. They are sitting right in front of everyone, so why are they also seemingly invisible to most candidates?. e.g Audit the Fed, defund the 1/2 Billion/year fiasco called Planned Parenthood and stop spying on all the American people. Simple, out in the open problems that only he has championed.
Exactly why The Media ignores him! Jim
But that would be facing reality. We certainly wouldn’t want to let that happen or we would face un precedented debt head on.
We would also face the stupid fiscal decisions of the last 40 years.
we have inflation, our dollar is worth less, goods,food are increasing at an alarming rate, plastic is being used instead of real dollars and the minimum wage is increasing
Mike : I enjoy reading your articles;however, I believe 100% cash is the only way to play the market at present. Our cash is sitting at TD America, Scottrade, and Well Fargo. Wells Fargo keeps calling to tell me that I am not making any money. I reply to Wells Fargo, if you don’t enjoy using our money for free, let me know and I will move It. They wait awhile before calling back. Our cash assets are parked once again until this market come back to reality. Losing $20K + on some false upside doesn’t bother us. We did this once before in July of 2007 and waited.
People laughed at me in 2003 when I told them, we would go to zero interest rates in the near future. We were headed the way of Japan.
We are still headed in the direction of Japan.
Their is no more quick growth within the borders of the good ole US of A.
Just want to say “ditto” to Scott’s comments on brokers calling me.
Study debt figures in relation to history. You will find that we are at all time highs in debt and consider the fact that debt collapses once we reach these levels and the associated outrageous price levels. Also look at disposable income. You’ll find that it’s actually decreasing. So maybe someone can inform me as to where consumption is going to come from in this brilliantly configured consumption economy that every country in the world is striving for. Most young people have no chance of be able to afford a home at the lowest interest rates in history.
We have reached an endpoint with the debt stimulation!
American politicians and their supposedly intelligent economists continue to compete for the least foresight the world has ever known.
Could be worse….You could live in Argentina with 40% of inflation and salaries increasing less than 20%
That is the one thing America has going for it. There are worse places in the world.
We have only one real problem in the USA.
That is the bought and paid for Congress which for at least the last 35 years has passed one law after another to favor the rich and corporations.
Laws which reduced the taxes on the rich, allowed corporations to profitably ship jobs overseas, reduced the power of unions, and allowed illegal immigration to further suppress wages. Laws which allow investment banking big shots to enter and run the agencies which regulate them.
Money now runs the government.
Hi Mike – Regarding wage stagnation, I first ran into this in the mid-1990s. I’ve been working in legal support positions since 1984, and am finally approaching the end of my career and retirement. My turning point came in 1997 – I was working for a regional office of one of the top 20 US law firms (in size and revenue). In January, firms like to send out an Email/memo to all employees to tell us how well or not they did in the previous year. Well, the message in 1997 was this: The firm is proud to announce that we have accomplished “double-digit increases in both revenues and profits” (obviously 10%+ growth). Further down in that same memo, the kicker: “From this point forward, staff raises will be limited to 2%-4% depending on performance.” When I was hired at the firm 2-1/2 years earlier, the policy for staff raises was a range of 4%-6%. The Firm decided it was new policy to push profits up the ladder to the top and squeeze more “productivity” out of the bottom for less money. How do you fix corporate policy of “we’ll keep the money because we can.”?
Thank goodness America still has some market economy.
Back in the 1980’s a Canadian political joke went like this “What is the difference between Canada and the USA? America has Bob Hope, Johnny Cash and Ronald Reagan. Canadians have no hope, no cash and Lying Brian†(a slang reference to the Canadian Prime Minister of the time). Fast forward 35 years and the middle class of both countries have little cash, no hope and are united in their mistrust of lying politicians of all stripes.
Mike, there is no politician that can solve Americas problems. We are past that. The middle class that I grew up with has now been starved to death. the 60’s was a time of growth through manufacturing, today we have whittled our way to unimaginable lows, and never to return. We will not be able to vote our way out of this horrendous problem. I hope I’m wrong. The only thing we manufacture a lot of now is debt.
Amen.
Stagnant wages we’ve had since the 1980’s.
-How about considering COLAS which have been decimated for our retirees whose pensions were based on reduced wages! Our retiree group used to get a 3% COLA increase each year but that was cut to 1-1.25% increases each, the past four years.
-How about considering unaffordable housing for the past 35 years – which rents
took 50-60% of our net incomes and made it impossible to save for the future, much
less to buy a home.
-How about new rent increases taking more of our reduced pensions.
-How about illegal immigrants who have taken up ALL of the once affordable modest
rent apartments.
-How about people feeling so insecure about the worldwide financial collapse(s) that
they are hiding money instead of spending, banking or investing it.
-How about Republicans refusing to authorize spending for infrastructure projects which would have provided jobs for our young men.
-How about the reduction of the velocity of money to 4.7.
Greenspan’s Lazy Fairy Fed gave us unaffordable housing and a worldwide Economic
Collapse.
How about the latest quarterly GDP and wage report. The only increase in wages was for government jobs. In other words the entity least able to afford the increase, that most in debt, gave increases anyway. Paid for by all those getting no increases. Exemplary fiscal management, eh?
Get rid of all existing politicians!
Oil prices were down 20% in the month of July. Until the oil industry recovers and is healthy again, we will continue to see a lackluster economy with only sub par, tepid growth.Boone Pickens is still talking about $70-$75 oil by year end but that is starting to seem highly unlikely now.Is that false optimism or do you consider that a realistic possibility ?
Want to know why wage growth is at it’s lowest level of all time? Because fed funds are at it’s lowest rate of all time. Being at 0% for 7 years does not work. It was a nice emergency measure in 2008 but it retards growth and inflation over time. Just look at Japan. Economic theory needs to be revised, since we have multiple examples of this diminishing effect of zero rates for too long of a time frame. If companies are not making interest on their cash reserves, why would they start increasing pay? The CPI is telling them there is no inflation (although everything I spend money on. except TVs, cost more), the fed says there is no inflation, why raise wages?
It really is simple……. All we have to do is fire the Republican Quislings who work at the behest of the wealthiest Industrial Leaders in this country. Rehire the Democrats who look out for the Interests of the Average American and things will improve…. Sadly, many of the most gullible among us actually believe the Propagandist Pablum that the GOP and their bosses are peddling every day. Not to worry, despite those who have sold their souls to the GOP, even the most gullible will eventually realize that what we are being told by the GOP is absolute garbage and they will vote with their pocketbook and we will be rid of these self serving morons, just like our Grandparents did in the 1930’s after that Republican Stock Market Crash and Depression….. :(
Dude! The only reason any one supports Republicans is because it is the only alternative we are offered to the destructive policies of the Democrats. It’s an anybody but Progressives deal. The Left Wing Social and economic experiment in this country is a disaster just like Europe’s. If you want to criticize Republicans, criticize their complete ineptness in trying to correct it. In truth, they like big government as much as Democrats and that’s the problem. Your parasitic big government is sucking the life out of our country. Stay away from the Kool Aid.
Yet history has shown us that you are dead wrong….. The greatest period of expanding economic success and the greatest period of growth of the Middle class happened between 1932-1981 under Democratic Domination. Since 1981 under the GOP all economic indicators have fallen and BOTH Stock Market Crashes and Depressions 1929 and 2007 happened on Republican watches with Republican Majorities… Looks like history tells us that you know nothing about economic history and are badly misinformed by the GOP lemonade!… :(
There are 18 trillion reasons why you are wrong!
I didn’t say I like Republicans. I despise dishonest Left Wing Loons like Nancy Pelosi. Harry Reid, John Kerry, Al Gore, and Bernie Sanders. They have taken my party so far Left of the ” good Democrats” of 32 to 81 I don’t recognize it anymore. Jim
Oh by the way. I’m a Third Generation Democrat of the Zell Miller variety.
You sound like a Democratic impersonator being paid by the GOP….. :(
I don’t know what Brooks is thinking about Trump. Our present, “Leader of the Free World”, has spent his time insulting and alienating our friends and allies and apologizing for our actions to sworn enemies, could “The Donald’ really do any worse,
Mike,
You are kinda changing your tune. A few months ago it was the economy was so great we had to see rates rise and now it’s geez,… things are slowing.
My personal opinion is that the world is facing a debt collapse and deflation like never before. Debt has never been this high in the history of the world. The central banks have never had so complete control with fiat currencies and there has never been so many methods of lending money and interest rates have never been essentially zero. Politicians don’t care about economic balance. They care about prolonging their pay. I’ll bet more than half of society doesn’t even know what “balanced budget” means let alone the fact that we haven’t had one for decades.
We have an excuse for every form of fiscal stupidity.
Opening the country to competition will create jobs.
Cheaper goods from the world will help us.
More debt helps consumption and that is good, no mention of balance.
Executives and politicians need every conceivable increase in pay but workers need competition.
Wall Street will make us all money for retirement based upon greater debt.
No need to balance budgets we just need to increase borrowing forever and hence increase the velocity of money, no limit.
Thank goodness the economy won’t slow on Bernanke’s watch.
We need to ignore illegal immigrant laws because they do jobs American’s won’t do, no concern for ignoring some laws and not others.
Politicians don’t currently make enough so lets allow them insure their future victory by ignoring laws.
We’ve become a society where each individual is only concerned for himself and can’t see the forest for the trees economically.
Here is another interesting one:
A consumption economy is the healthiest and most vibrant economy.
In fact China with all it’s healthy savers is trying to turn its economy into a consumption economy. I have no idea how American politicians convinced China to follow this course but it surely is the epitome of what’s wrong with society’s economic leadership.
This is part of History,the rich will get richer and the poor will get poorer it happens in cycles.
Donald Trump is a business man and Government is a “BIG BUSINESS”
So do you want someone whom understands Big business or do you want a WANABEE.
Wages have been stagnating for decades. There are numerous reasons why, but one that barely gets mentioned is the fact that having a never ending supply of undocumented workers from mexico (and points south) has kept a lid on wages since Reagan was in office.
I have lived this reality first hand as I have worked in the building trades in California since 1987.
In 1988 I was getting paid $22.14/hr as a laborer, this only 2 yrs after Reagan’s Amnesty of 1986. Flash forward to today and I feel lucky to bill out at $30/hr as a journeyman. There is no country in the World I can work in without a passport a visa, and entering that country through a LEGAL port of entry. Building a wall on the border is a stupid and expensive idea. Only by requiring all businesses to use E-Verify for their employees to ascertain who has a legal right to work in the US, and fining any business $10,000 per undocumented employee will go a long way towards fixing the issue of wages spiraling downward.
Only when and If millions of undocumented felons are deported will wages begin to rise in earnest.
Obama has deported more illegals than the Republicans that came before him….. Reagan opened the borders to crush the American Labor Movement….. Want to know why wages are stagnant and the Ultra Wealthy are getting richer? Thank the GOP who are supported by those ultra wealthy… Remember that come elections 2016!…
Everyone is tired of the ‘mealy-mouth afraid to take a stand’ from anything but the left. Even people most think would be offended by Trumps remarks aren’t; you can’t solve the empire’s problems without stepping on a few toes. Trump, Cruz and Fiorina seem to be the only candidates to realize this. And we need Herman Kane for sec of state. We need to get rid of the Ivy League Mafia, that’s the big problem; they set the stage of public forum; all of our issues are the result of their machinations, not a Party issue.
The mentally ill Democrats elected into office by the uninformed have taxed, spend and regulated the capitalist system into bankruptcy.
The domestic economy is reaping several of decades of off shoring industry which was done for several reasons; low, even tiny wages, slack pollution laws, low taxes, access to political systems or favored treatment from de facto US colonies. That was the model and now we are living in the result of those conscious policies. On top of that new normal, we have a new full on cold war being fought AND paid for by deficit spending. The cost is huge, its well beyond any reporting systems which as we know are basically self promotion tools. Forget ‘political parties’ solving anything since they are both puppet fronts for the ring masters. Unfortunately, what we have is the new normal. The message is; no you can’t have higher wages, in fact look to real cuts, you will pay for anti pollution laws, reduce corporate taxes and maybe we might come back or … maybe foreign companies might come in to help the domestic market! The big US corps are mainly interested in USGov military ‘defense’ contracts. I would look for an individual led recovery. Just help yourself and make your own networks as best you can. Don’t expect too much.
Trump would be the only the third rich
President in since 1900, the other two were
Teddy and Franklin Roosevelt .
In 2000 Trump proposed paying off the national
Debt with a one time wealth tax of 15% on wealthy
Americans with over $10 million in net worth .
Like him or not He is the only candidate who would
Be a transformative President
Perhaps like the Roosevelts
Gee, except he is a Republican and therefore, regardless of what he is saying, if brought to office, would do exactly the opposite of what he is presently saying as opposed to the Roosevelt’s who really helped the Average American as Progressive Liberals….
Additional recent wealthy Presidents were Kennedy, Johnson and Reagan and both Bush’s