Is The American Dream Forever Changed?
By Justin Gardner | Related entries in Economy
So much wealth has been lost, and not just at the top.
Yahoo Finance has some sobering numbers…
There’s no question the American consumer is hurting in the face of a burst housing bubble, financial market meltdown and rising unemployment.But “the worst is yet to come,” according to Howard Davidowitz, chairman of Davidowitz & Associates, who
believes American’s standard of living is undergoing a “permanent change” – and not for the better as a result of:
- An $8 trillion negative wealth effect from declining home values.
- A $10 trillion negative wealth effect from weakened capital markets.
- A $14 trillion consumer debt load amid “exploding unemployment”, leading to “exploding bankruptcies.”
“The average American used to be able to borrow to buy a home, send their kids to a good school [and] buy a car,” Davidowitz says. “A lot of that is gone.”
No doubt that the end of Americans spending more than you save is a good thing, but since our economy is fueled by deficit spending, both private and public, I doubt our personal economic outlooks are going to get much rosier anytime soon. Especially since this “new era of responsibility” will probably decimate the retail sector.
Thoughts?
This entry was posted on Thursday, February 19th, 2009 and is filed under Economy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
February 19th, 2009 at 11:13 pm
My guess is that this “New Era of Responsibility” entails the government taking more and more responsibility for the daily lives of its citizens. Obama set us up for this when he spoke of the Federal government being the “only thing left” to get us out of this mess. He stated that our depression in the 30’s lingered and the Japanese lost a decade because the citizens didn’t concede enough countrol over the means of production to the government.
I don’t hear Obama encouraging citizens to save their money and ride out the recession. All I hear is how we need to unfreeze the credit market and get banks lending again, which means we need more borrowers. I see interest rates at zero. I see a mortgage bail out designed to give new lines of credit to people who never should have gotten credit to begin with. Nothing to do with saving, only “stimulus” to reflate the credit bubble when people still don’t have any money.
I also see a push to nationalize health care and financial institutions. I see the government bailing out failed industries with billions of dollars of borrowed money and, as a condition, telling them what to manufacture. There are rumblings about the fairness doctrine and even banning foods that make you fat. Kids go to school and don’t think they should be graded according to merit.
I am not hopeful for a return to the free market and personal responsibility. Why are you so glum, Justin? Isn’t this what you always wanted?
February 19th, 2009 at 11:42 pm
Coming from someone who supported every failed policy of the last 30 years that got us into this sorry state, I can certain understand why you see think trying something else is a bad idea.
No where has Obama said he wants government to take more and more responsibility for the daily lives of citizens. That’s more right wing nonsense from a group of people who have pillaged this nation of all its riches and is hoping to get the last few grains or rice.
What Obama wants–or at least I hope he wants–is to rein in the rich and powerful who have exploited and manipulated the system for personal gain.
That means setting up a system with guidelines and regulations to make sure the game is played fairly. The touts a free market as being the cure all for everything, but you cannot have a free market without an adequate number of players. When a few can manipulate the system to squeez out the many, and when those few control the market, everyone else loses.
That’s where 30 years of Conservative Corporatist politics has taken us. I hope you’re enjoying it.
February 20th, 2009 at 6:56 am
Jimmy, nearly everything you described was started by your hero Bush. Bailouts, huge unfunded growth in medicare, zero intrest rates, stimulus, credit bubbles, intrusion into our private lives. Looks like what you’re saying is that Obama is too much like the republicans you worship and adore. You should love him.
PS. BTW, the stuff that isn’t like Bush, I guess you mostly just made up. Show me where Obama has ever said one word about nationalized health care.
February 20th, 2009 at 12:43 pm
I supported an agressive approach to the war against Islamic fascists and consistently defended the Iraq war. I like low taxes, and I am a pro-life activist. Thats about all me and Bush stand eye-to-eye on. Remember there are only 2 candidates to pick from for President. Oh, and I actually voted for Nader in 2000!
Bush was a republican, but he wasn’t a conservative. Hopefully those days are over for the GOP, but it seems the American public wants their asses wiped by the nanny state. Especially if its from a saviour like Obama. And I won’t speak for you specifically the way you like to speak for me, but clearly there is a cult of personality with Obama that Bush never had with his supporters.
You can’t keep saying “Bush started it” and then go back to Obama’s “change” mantra if there isn’t any. If you are like me and think that Bush’s approach to the Federal Reserve, mortgage and lending, or government bail-outs were bad, how can you champion Obama when he is doing exactly the same things but 10 times worse!.
February 20th, 2009 at 3:20 pm
Yeah – Lets repeat that for emphasis:
My first nominee for the 2009 Intellectually Bankrupt Argument of the Year, is when you ask the question of where the money is going to come from for the breathtaking Olympian levels of spending and deficits being advocated by this administration, and the answer is “Oh yeah – well – the Bush administration Republicans took our good Democratic surplus and created a huge bad Republican deficit. So there.” Most recent performance of this argument by a senior administration spokesman in a national venue being David Axelrod on Meet The Press.
The cognitive dissonance stops me in my tracks every time. Once I put the pieces of my exploded head back together, I just want to ask one thing:
Please, Please explain to me – If the Big Government, Big Spending, and Big Deficits under the Republicans was bad (which I agree 100%), exactly why is the Bigger Government, Bigger Spending, Bigger Deficits advocated by the Democrats so good?