Wow! Anyone else listen to the Diane Rehm Show today?

[Anonymous]

I don't know. My DH was in financial services so we got hit with the earliest wave of this crap and it basically bankrupted us in our 40s. We know we will work until we're 70, at least, if we ever retire. But, I was also born into foster care, was very poor during my childhood, graduated college in a recession ('91), took years to find that first job, and have basically struggled to put food on the table for most of my life. None of this is news to me. I say all this only to show that I'm no pollyanna who lives in some fantasy land.

Yet, I still think the gloom and doom talk about the economy is hyperbolic and unrealistically pessimistic. America has a LOT going for it, as do Americans. We have much better incomes than most of the world, we're the best market in the world, and we have an unparalleled capacity for innovation and entrepreneurialism. Plus, our competitor nations are aging much harder and faster than us, and we are far better at integrating immigrants, which gives us an external source of labor that most other aging economies don't have. In the long run, we are really in a good position. Yes, we need to improve education (especially grade inflation, IMHO), but there's too much looking at our weaknesses and not enough looking at our strengths, again IMHO.

In the short term, I think that what happened is that we all forgot that the economy doesn't always grow, we spent too much on consumer debt, and now we're in a phase where we're all knocking that debt out. Once we get into a better equity position on our homes (paid equity, not market) and with our credit cards, I think things will get better. The private sector is creating jobs (it's the government job losses that drag those numbers down), which I think is very important. Also, the private sector has been squeezing blood out of a stone in terms of productivity per hour, and will have to start hiring at some point. It will be temporary work, but as businesses realize they can afford the "extra workers" things will calm down. I see a few more years of anemic growth (2-3%) as people knock debt out and businesses adjust their workforces, but I think we will return to a better equilibrium point much sooner than many people might think given how dark it sometimes feels now.

[Anonymous]

Anonymous wrote:I don't know. My DH was in financial services so we got hit with the earliest wave of this crap and it basically bankrupted us in our 40s. We know we will work until we're 70, at least, if we ever retire. But, I was also born into foster care, was very poor during my childhood, graduated college in a recession ('91), took years to find that first job, and have basically struggled to put food on the table for most of my life. None of this is news to me. I say all this only to show that I'm no pollyanna who lives in some fantasy land.

Yet, I still think the gloom and doom talk about the economy is hyperbolic and unrealistically pessimistic. America has a LOT going for it, as do Americans. We have much better incomes than most of the world, we're the best market in the world, and we have an unparalleled capacity for innovation and entrepreneurialism. Plus, our competitor nations are aging much harder and faster than us, and we are far better at integrating immigrants, which gives us an external source of labor that most other aging economies don't have. In the long run, we are really in a good position. Yes, we need to improve education (especially grade inflation, IMHO), but there's too much looking at our weaknesses and not enough looking at our strengths, again IMHO.

In the short term, I think that what happened is that we all forgot that the economy doesn't always grow, we spent too much on consumer debt, and now we're in a phase where we're all knocking that debt out. Once we get into a better equity position on our homes (paid equity, not market) and with our credit cards, I think things will get better. The private sector is creating jobs (it's the government job losses that drag those numbers down), which I think is very important. Also, the private sector has been squeezing blood out of a stone in terms of productivity per hour, and will have to start hiring at some point. It will be temporary work, but as businesses realize they can afford the "extra workers" things will calm down. I see a few more years of anemic growth (2-3%) as people knock debt out and businesses adjust their workforces, but I think we will return to a better equilibrium point much sooner than many people might think given how dark it sometimes feels now.

I admire your resilience, but ... your points about our incomes, our market, etc., are mostly backwards looking and IMO do not account for the fundamental shifts in the world economy, including that we produce very little now, we have very poor math, science and engineering education and workforces, the jobs being created are not those that will sustain long term growth, etc.

I'm much more pessimistic than you. I think we're pretty well fucked for a long time to come, at least for millions of current and formerly middle class people who will struggle for years for any semblance of the life many of us have been lucky to lead. I'm lucky, I'm close to retirement and well funded with stable employment and I count my blessings daily, but the extent of the disclocation and misery around us, and to come, is just staggering to me.

[Anonymous]

Things are as they always are, in balance. It was out of balance when peoples' expectations were raised unjustifiably within bubbles. Life is hard for most. It was always that way. It will always be that way.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I don't know. My DH was in financial services so we got hit with the earliest wave of this crap and it basically bankrupted us in our 40s. We know we will work until we're 70, at least, if we ever retire. But, I was also born into foster care, was very poor during my childhood, graduated college in a recession ('91), took years to find that first job, and have basically struggled to put food on the table for most of my life. None of this is news to me. I say all this only to show that I'm no pollyanna who lives in some fantasy land.

Yet, I still think the gloom and doom talk about the economy is hyperbolic and unrealistically pessimistic. America has a LOT going for it, as do Americans. We have much better incomes than most of the world, we're the best market in the world, and we have an unparalleled capacity for innovation and entrepreneurialism. Plus, our competitor nations are aging much harder and faster than us, and we are far better at integrating immigrants, which gives us an external source of labor that most other aging economies don't have. In the long run, we are really in a good position. Yes, we need to improve education (especially grade inflation, IMHO), but there's too much looking at our weaknesses and not enough looking at our strengths, again IMHO.

In the short term, I think that what happened is that we all forgot that the economy doesn't always grow, we spent too much on consumer debt, and now we're in a phase where we're all knocking that debt out. Once we get into a better equity position on our homes (paid equity, not market) and with our credit cards, I think things will get better. The private sector is creating jobs (it's the government job losses that drag those numbers down), which I think is very important. Also, the private sector has been squeezing blood out of a stone in terms of productivity per hour, and will have to start hiring at some point. It will be temporary work, but as businesses realize they can afford the "extra workers" things will calm down. I see a few more years of anemic growth (2-3%) as people knock debt out and businesses adjust their workforces, but I think we will return to a better equilibrium point much sooner than many people might think given how dark it sometimes feels now.

I admire your resilience, but ... your points about our incomes, our market, etc., are mostly backwards looking and IMO do not account for the fundamental shifts in the world economy, including that we produce very little now, we have very poor math, science and engineering education and workforces, the jobs being created are not those that will sustain long term growth, etc.

I'm much more pessimistic than you. I think we're pretty well fucked for a long time to come, at least for millions of current and formerly middle class people who will struggle for years for any semblance of the life many of us have been lucky to lead. I'm lucky, I'm close to retirement and well funded with stable employment and I count my blessings daily, but the extent of the disclocation and misery around us, and to come, is just staggering to me.

I choose to believe that the first poster is correct and the second poster is wrong.

[Anonymous]

Why do you think business have to hire? What sector of the US is growing?

[Anonymous]

The US will never be the same. There is no impending next big thing that will spur on our economy. Yes, it will eventually come, but not for some time. And even so, I doubt it will bring back the jobs and prosperity like previous recoveries did. We live in a digital age. What are the biggest things right now? Apple, Facebook, etc. And those have given us very few jobs. So many of the jobs lost in the crash where construction related. They are not coming back anytime soon. Meanwhile, businesses all over have learned how to run their businesses with fewer people by either getting more work out of their current people or employing computers are robotics to help pick up the slack. Why would these employers EVER hire more people again with these new efficiencies?

Meanwhile all of these young people who are not working are not gaining the skills they need to take over when the baby boomers eventually do retire. Who is going to replace them? Nothing replaces years of experience they are not getting. So I'm very scared of how US companies are going to compete in the future with this huge talent hole.

There are some good things that will come out of this. Multi-generational households. The US is one of the very few countries where people move so far away from their families. I'm not saying this is for everyone, but in many ways it's better for families to stick together. Less people living alone in nursing homes. Less cost to the government. Cheaper cost of living for everyone with shared housing expenses, no babysitting costs, etc. Richer experience overall for all generations to interact with the other family members.

[Anonymous]

Anonymous wrote:

Anonymous wrote:
How have you had to change your life or plans due to the economic slow down?

I live with family. I'm divorced and can't afford to pay daycare, rent and minimum payments towards my debt (half of which is student loans, half of which is from the divorce, the only consumer debt I've got is $5K on my car) on my salary, so I live at home, at 27, with my kid. I work FT and throw everything I can at my debt and my savings. Moving out will have to wait until DC is no longer in FT daycare. I've also put off grad school (which would bump my salary level up to liveable) indefinitely. I work a job I absolutely hate because it's the only thing I could find that paid me more than $40K.

This area has many, many more opportunities than the one I recently left (within the past year). The COL is way more expensive, but I make more than double what I was making this time last year. I can now afford to go to the dr and the dentist, I'm not worried about the level of care DC is receiving at daycare and I have money to put towards my debt. As much as I hate where I work, there is more room for growth here than where I was. I get minimal child support ($100/wk) and will likely never receive any more than that due to XH's work history and skills.

I highly doubt that I will ever own a home and grad school is a pipe dream as long as I remain a single parent. I've resigned myself to working in an industry I despise because it's where my experience is and where the money is. Changing careers to something fulfilling is impractical at best right now and for the foreseeable future. Having more kids (which I do very much want) is also something that is likely not going to happen.

The economy has turned the dreams of success that I had in college to dreams of survival. I just want to be self-sufficient.

I think I remember you from another thread, about whether or not you could get a housing voucher (if you're the same person). Just wanted to let you know I think about your posts sometimes and hope you are WRONG about your future. I think life may hold more and better things for you. Just a gut feeling. Good luck, internet stranger.

[Anonymous]

How many troops are returning from Iraq next month? How many more will return from Afghan over the next couple of years? Where will they find jobs? The DOD contractor game will slowly wind down with the wars so even that won't be a good option for former military.

What possible next big industry boom will require a ton of workers? In this digital age. Unless it's building high-speed rail lines or repairing our aging infrastructure, almost everything else can be done by computers anymore. Oh yeah, there is always retail. More $9/hour retail jobs are exactly what's going to save us.

[Anonymous]

Anonymous wrote:How many troops are returning from Iraq next month? How many more will return from Afghan over the next couple of years? Where will they find jobs? The DOD contractor game will slowly wind down with the wars so even that won't be a good option for former military.

What possible next big industry boom will require a ton of workers? In this digital age. Unless it's building high-speed rail lines or repairing our aging infrastructure, almost everything else can be done by computers anymore. Oh yeah, there is always retail. More $9/hour retail jobs are exactly what's going to save us.

Yeah, and even that is fading. Walmart, Target, and supermarkets. The small boutique stores are all that's left of local businesses (or soon will be). And they aren't really hiring the people who couldn't get a job anywhere else - they're hiring people who shop at stores like them who are working for fun or part time or for extra money. Sad, sad, sad. I hope our children think of a solution. I have to think that some of the solution is going to be people like us deliberately bucking the stream, hiring and buying local where we can, seriously buying USA made stuff, even at a higher price. Buying from etsy (a small person on etsy, not a big shop) or a small business. But one person can only do so much. Just today my mother "liked" walmart on facebook. W.T.F.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Thanks PP for this link! I had missed this article!

There was also a great story on CNN (Fareed Zakaria GPS) about a month ago called "Fixing Education" or something like that. A VERY sobering reflection on the state of American education and where we stand internationally.

A true wake up call.

Can you give a quick synopsis?

The main points I can remember this documentary touched on were where the US stands internationally on science and math (#27 I think it was); and how too often "your zipcode is your destiny" in terms of the mobility upward on the ladder of success. Simply put they asserted that upward mobility is coming to a standstill for kids not lucky enough to have well functioning and performing public schools.

There was a very interesting comparison of the US to South Korea and Norway, two cultures who approach education very differently than we do, and also are polar opposites yet both achieve tremendous success in education in their respective countries.

I found it particularly interesting watching the profile of Norway - they pay teachers very highly and it is more competitive to get into school to become a teacher than it is to get into medical school there, if I recall correctly! The prestige of teaching is very high and well compensated. They do all this with shorter school days than we do here. Of course Norway is a very different country demographically and much smaller as well and the person they were interviewing (Head of Education or something?) acknowledged this and how in America we have such diversity of backgrounds, language, that make it harder to serve all children well.

The South Korean profile was opposite of Norway in terms of hours spent on rote training and drills and on extra curricular tutoring sessions that pretty much all kids attend until 10pm on week nights. Uniforms in school and often single sex classrooms -- a ton more pressure than in Norway yet with superior results in terms of the level of education and skill the kids leave school with when they graduate.

I recommend watching it if you can!

http://globalpublicsquare.blogs.cnn.com/2011/11/06/zakaria-fix-education-restore-social-mobility/?iref=obinsite

http://globalpublicsquare.blogs.cnn.com/2011/11/05/gps-special-fixing-education/

[Anonymous]

Anonymous wrote:

Anonymous wrote:I don't know. My DH was in financial services so we got hit with the earliest wave of this crap and it basically bankrupted us in our 40s. We know we will work until we're 70, at least, if we ever retire. But, I was also born into foster care, was very poor during my childhood, graduated college in a recession ('91), took years to find that first job, and have basically struggled to put food on the table for most of my life. None of this is news to me. I say all this only to show that I'm no pollyanna who lives in some fantasy land.

Yet, I still think the gloom and doom talk about the economy is hyperbolic and unrealistically pessimistic. America has a LOT going for it, as do Americans. We have much better incomes than most of the world, we're the best market in the world, and we have an unparalleled capacity for innovation and entrepreneurialism. Plus, our competitor nations are aging much harder and faster than us, and we are far better at integrating immigrants, which gives us an external source of labor that most other aging economies don't have. In the long run, we are really in a good position. Yes, we need to improve education (especially grade inflation, IMHO), but there's too much looking at our weaknesses and not enough looking at our strengths, again IMHO.

In the short term, I think that what happened is that we all forgot that the economy doesn't always grow, we spent too much on consumer debt, and now we're in a phase where we're all knocking that debt out. Once we get into a better equity position on our homes (paid equity, not market) and with our credit cards, I think things will get better. The private sector is creating jobs (it's the government job losses that drag those numbers down), which I think is very important. Also, the private sector has been squeezing blood out of a stone in terms of productivity per hour, and will have to start hiring at some point. It will be temporary work, but as businesses realize they can afford the "extra workers" things will calm down. I see a few more years of anemic growth (2-3%) as people knock debt out and businesses adjust their workforces, but I think we will return to a better equilibrium point much sooner than many people might think given how dark it sometimes feels now.

I admire your resilience, but ... your points about our incomes, our market, etc., are mostly backwards looking and IMO do not account for the fundamental shifts in the world economy, including that we produce very little now, we have very poor math, science and engineering education and workforces, the jobs being created are not those that will sustain long term growth, etc.

I'm much more pessimistic than you. I think we're pretty well fucked for a long time to come, at least for millions of current and formerly middle class people who will struggle for years for any semblance of the life many of us have been lucky to lead. I'm lucky, I'm close to retirement and well funded with stable employment and I count my blessings daily, but the extent of the disclocation and misery around us, and to come, is just staggering to me.

Be as pessimistic as you like. But don't confuse your emotional state with the state of the world. Without giving too much away, because it might identify me and because I think your pessimism is coloring your views in a way that means I won't get listened to if I did lay out the full case, suffice to say I study this stuff all day every day and have for decades. There are certainly things to worry about in the LT trends - like how we're going to pay for the health care of the baby boomers, particularly when they are in their final 5 years of life and demanding extreme medical measures, which is very expensive - but there is also plenty of strength in the long-term picture, mostly that never gets reported. For example, your point about STEM education. Did you know that we're graduating 4 times the number of STEM grads that we did in the post-Sputnik era - which people think is some kind of golden age for science - and that scores on national tests are at an all time high and have been improving (or at least staying the same) for four decades? I know that's not the mainstream narrative and you probably won't believe it, so I encourage you to look at the numbers yourself. Look - there can also be a kind of "bubble" of negativity that feeds on itself and makes it all seem scarier and worse and never-ending than it is. Just like in the good times, when people think the gravy train won't stop, people have a hard time seeing the end of the bad times too. That's just the nature of the human psyche.

Bottom line, I think that no one yet knows what Gen Y can do because they are still at the beginning of their working years and the economy has given them a whopper of a negative position from which to start. But, they are a very energetic, smart, and creative bunch and I think they are going to reshape the country and the globe. Yes, it's true that we won't have the lead we had in post WW2 when the rest of the world was in shambles and we had an enormous head start because we weren't, but I think it's a bit of boomer arrogance, frankly, to doom us all to lives of stagnation and awfulness just because our future doesn't look like your past.

[Anonymous]

PP thank you for the perspective -- while I don't know the veracity of your statements or what data backs it up, we should nevertheless be discerning consumers of mainstream news media -- which now is selling a lot of stories of the "doom and gloom".

I am a daughter of two immigrants and my sibling and I are the first US citizens and IMO this is still the best place in the world to live-- which should spur us all on in bad times so we can see our kids grow up resilient and forward-thinking.

[Anonymous]

7:17, this is 7:11. Exactly.

[Anonymous]

I agree. To some extent I blame baby boomers for being so greedy. It is easy to blame generations x and y yet boomers are the ones who got us into this mess with helicopter parenting, greed, housing bubble, building McMansions while failing to think about infrastructure, cost of higher education, I could go on and on. What happens when all boomers draw from social security and medicare, living longer and longer with health care the way it is? Who is going to pay for it? The unemployed, the underemployed? The rich keep getting richer and the rest of us are just screwed!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I don't know. My DH was in financial services so we got hit with the earliest wave of this crap and it basically bankrupted us in our 40s. We know we will work until we're 70, at least, if we ever retire. But, I was also born into foster care, was very poor during my childhood, graduated college in a recession ('91), took years to find that first job, and have basically struggled to put food on the table for most of my life. None of this is news to me. I say all this only to show that I'm no pollyanna who lives in some fantasy land.

Yet, I still think the gloom and doom talk about the economy is hyperbolic and unrealistically pessimistic. America has a LOT going for it, as do Americans. We have much better incomes than most of the world, we're the best market in the world, and we have an unparalleled capacity for innovation and entrepreneurialism. Plus, our competitor nations are aging much harder and faster than us, and we are far better at integrating immigrants, which gives us an external source of labor that most other aging economies don't have. In the long run, we are really in a good position. Yes, we need to improve education (especially grade inflation, IMHO), but there's too much looking at our weaknesses and not enough looking at our strengths, again IMHO.

In the short term, I think that what happened is that we all forgot that the economy doesn't always grow, we spent too much on consumer debt, and now we're in a phase where we're all knocking that debt out. Once we get into a better equity position on our homes (paid equity, not market) and with our credit cards, I think things will get better. The private sector is creating jobs (it's the government job losses that drag those numbers down), which I think is very important. Also, the private sector has been squeezing blood out of a stone in terms of productivity per hour, and will have to start hiring at some point. It will be temporary work, but as businesses realize they can afford the "extra workers" things will calm down. I see a few more years of anemic growth (2-3%) as people knock debt out and businesses adjust their workforces, but I think we will return to a better equilibrium point much sooner than many people might think given how dark it sometimes feels now.

I admire your resilience, but ... your points about our incomes, our market, etc., are mostly backwards looking and IMO do not account for the fundamental shifts in the world economy, including that we produce very little now, we have very poor math, science and engineering education and workforces, the jobs being created are not those that will sustain long term growth, etc.

I'm much more pessimistic than you. I think we're pretty well fucked for a long time to come, at least for millions of current and formerly middle class people who will struggle for years for any semblance of the life many of us have been lucky to lead. I'm lucky, I'm close to retirement and well funded with stable employment and I count my blessings daily, but the extent of the disclocation and misery around us, and to come, is just staggering to me.

Be as pessimistic as you like. But don't confuse your emotional state with the state of the world. Without giving too much away, because it might identify me and because I think your pessimism is coloring your views in a way that means I won't get listened to if I did lay out the full case, suffice to say I study this stuff all day every day and have for decades. There are certainly things to worry about in the LT trends - like how we're going to pay for the health care of the baby boomers, particularly when they are in their final 5 years of life and demanding extreme medical measures, which is very expensive - but there is also plenty of strength in the long-term picture, mostly that never gets reported. For example, your point about STEM education. Did you know that we're graduating 4 times the number of STEM grads that we did in the post-Sputnik era - which people think is some kind of golden age for science - and that scores on national tests are at an all time high and have been improving (or at least staying the same) for four decades? I know that's not the mainstream narrative and you probably won't believe it, so I encourage you to look at the numbers yourself. Look - there can also be a kind of "bubble" of negativity that feeds on itself and makes it all seem scarier and worse and never-ending than it is. Just like in the good times, when people think the gravy train won't stop, people have a hard time seeing the end of the bad times too. That's just the nature of the human psyche.

Bottom line, I think that no one yet knows what Gen Y can do because they are still at the beginning of their working years and the economy has given them a whopper of a negative position from which to start. But, they are a very energetic, smart, and creative bunch and I think they are going to reshape the country and the globe. Yes, it's true that we won't have the lead we had in post WW2 when the rest of the world was in shambles and we had an enormous head start because we weren't, but I think it's a bit of boomer arrogance, frankly, to doom us all to lives of stagnation and awfulness just because our future doesn't look like your past.

Agree 100%. Stop reading newspapers and reading the internet for your economic info, people. Here's something that I believe, and pessimists won't, but check back here in 10 years and I will bet my house that I'm right: With the boomers retiring, by 2020, just about everyone who wants a job will have one, at high wages. Now, these wages will actually be inflationary, which will stink for some people, but will be excellent for others. (Those of us with fixed rate mortgages, for example). By 2025, we will be incentivizing immigration to get all the people we need, and will be competing for the top talent of other countries with incentive packages to get them to come here.