There has been “chatter” particularly from those trying to find some way to salvage anything that might look like a legacy for President Bush that are desperately trying to cling to the notion that they U.S. economy is in or headed towards a recession.
They point to things like the old outdated definition that a “recession” is 2 or more quarters of decline in the country’s Gross Domestic Product. Most economists however do no like this definition since it does not take into consideration unemployment rates or consumer confidence. There are of course a couple of problems with this.
First and foremost is the fact that “domestic” companies no longer directly reflect on how strong the economy locally is since so much production has been moved overseas or “outsourced.” So while Mattel can can reap huge profits selling us lead paint based products, the benefits are not seen in the domestic job market since all these toxic products are made in China where they can pay slave wages and not worry about silly little things like safety standards which only “erode profits.”
Finally, any attempts by workers here to try and unionize and earn a fair wage are thwarted by union busting activites. Wal-Mart is well known for hiring consultants that threaten workers trying to unionize, and even (as much as it pains me to say it), Starbucks has seemed to taken to firing employees that are active in unionizing efforts there. Wal-Mart doesn’t surprise me since they tend to be ruthless with everybody, vendors and employees alike. Starbucks on the other hand makes a big deal over their “fair trade coffee.” So essentially, they are concerned with workers getting a “fair wage” in some third world country for picking the beans, but here at home, well that is a different story all together.
I am getting a bit off topic, but really the point is, I am not surprised that the “well to do” (and those that blindly follow them regardless of their own reality) do not see a recession. They look at their stock portfolio, and as long as Mr CEO is turning in 15% and up growth in the stock, they couldn’t care less how it is done. Unions have garnered a bad reputation (some of it admittedly it deserved), but are really there to even the playing field to give the workers some bargaining strength against these large corporations that couldn’t care less about workers. Workers here are viewed, not as assets, but as “expenses” and that is just wrong. And of course, if you are not struggling to make ends meet, you don’t care that your meal dollar isn’t stretching because food companies are making products smaller while keeping the prices the same, because as long as those stocks are profitable, well you will just buy more food.
By these definitions, there will never be a “recession” again. Idiots will continue to tell us how we are doing “well” but just don’t know it. There used to a joke that went something like, a recession is when your neighbor loses his job, a depression is when you lose yours. It is overly simplistic, but I think explains the chasm in opinions quite well.
Maybe the government should have just let Bear Stearns fail and go insolvent. Maybe then some of these people would have gotten a clue that there is a problem. As a parent this lack of vision scares the hell out of me. Not only for me, but for the children of tomorrow. As we become a “service” society, we are heading towards a two tier model. There will be those that “have” (the bosses, CEOs and other executive types) and those that serve them (wait staff, valets, security guards, etc) and nothing in between. The middle class will be wiped out, outsourced overseas and be told that it didn’t happen.
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