Thursday, June 05, 2008

An informative article.

No confusing technical jargon...just a clear explanation of why the things some news stations are saying about "the worst being over" is absolutely, totally, completely wrong. I won't excerpt this article, because there's really nothing to leave out. I'll just post this link, and the last paragraph.

June 3, 2008
"The Remorseless Algebra of a Deflationary Death Spiral”
The Withering Economy

...The real origin of the problem is rooted in the prevailing "trickle down" orthodoxy which opposes any increases in wages or benefits for working people. Henry Ford realized what today's captains of industry and finance refuse to accept; that if workers aren't adequately paid for their labor and wages do not keep pace with production then the economy cannot grow because consumers do not have the money to buy the things they make. It's just that simple. Greenspan and his ilk believed that they could prosecute the class war and make up the difference by relaxing lending standards, changing bankruptcy laws, and by creating a nearly endless array of exotic financial products that expanded credit. But shifting wealth from one class to another has its costs. By crushing the worker the Friedmanites have killed the golden goose. The world's most prosperous consumer society is in deep, deep distress.

On its death bed, actually.

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