Tag Archives: Unemployment

Look Out When The Stock Markets Reopen Tomorrow !

Today is a national holiday (Martin Luther King Day) in the United States, and the stock markets are closed. Markets around the world have been tanking today because of the deepening U.S. recession.  If you’ll excuse the expression, the economy is “going to the dogs”.

So, look out tomorrow when the U.S markets reopen. Will tomorrow come to be known as “Black Tuesday” ? Buckle your seat belts, and don’t say we didn’t warn you !

I’ve been blogging lately about the fact that the U.S. economy is in serious trouble. Read all about it, here !

– RoutingByRumor

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Dear President Bush…

Dear President Bush,

Thank you for finally waking up and smelling the coffee regarding the dire condition of the American economy. We were beginning to wonder if you’d ever notice.

Your fellow Americans have certainly noticed. We notice it when we find it increasingly difficult to pay our bills. We notice it when we can’t afford health insurance. We notice it when we can’t find a decent paying job, or any job at all. We notice it when we can’t afford to heat our homes or fill our gas tanks. We notice it when we are laid off. We notice it when food keeps getting more and more expensive. We notice it when more and more of the wealth in America is being concentrated at the very top of the economic ladder, while things are getting worse and worse for the poorest Americans. See our recent blog post entitled “Need Proof That The US Economy Is In Trouble?

How on God’s green Earth could you have missed the signs up until now? Here are just a few of the clearest indications of trouble we think you might have missed…

– Record high energy prices

– Americans unable to heat their homes

– Americans unable to afford health care

– Record numbers of Americans losing their homes

– A depressed real estate market

– The highest inflation rate in decades

– A very troubled job market

– Thousands of mass layoff actions by employers

– America’s almost total inability to enforce it’s borders, and the resultant illegal immigrant and undocumented worker problems

– The loss of most American manufacturing jobs

– America becoming almost totally dependent on China for consumer goods

– A minimum wage that guarantees poverty for millions of American families

– Rampant corporate scandals, from Adelphia, to Brocade, to Enron, to Tyco to Worldcom

– Spending more than $1 TRILLION on the Iraq war (see Washington Post article), with no end in sight

– Americans unable to afford retirement, and worried about a bankrupt Social Security system

Need more proof? The U.S. Bureau of Labor Statistics reports that there were 1,800 mass layoff actions of American workers in November, 2007 alone ! They define a layoff action as an event involving 50 or more (thousands, in many cases) employees at a single employer. That’s a minimum 0f 90,000 workers (probably more like several hundred thousand) losing their jobs in mass layoffs, in November alone. And that’s only counting MASS layoffs, which are the tip of the unemployment iceberg. For instance, the BLS says that almost a half-million more Americans joined the ranks of the unemployed in December 2007 alone !  That’s so hard to believe, we’ll repeat it again…  almost a half-million more Americans joined the ranks of the unemployed in December 2007 alone !

So, Mr.President, I was wondering what finally caught your attention. All of a sudden, your administration is talking about an economic emergency. Plans are being floated to provide assistance to Americans, among them, huge tax rebates and increased unemployment benefits. Your administration is using terms like “immediate” and “robust” to describe the economic stimulus plan you are now formulating. Better late then never.

Could it be that you finally noticed because some of America’s largest financial institutions are now feeling the pinch? Within the last few days financial giants including Citibank and JP Morgan have reported huge losses and impending (or continued) layoffs. It sounds like you may have not been taking the economy seriously until the big boys started hurting. Now, finally, your administration has shifted into crisis mode.

Would you like this American’s two cents worth of advice?

It’s really quite simple. The U.S. economy will not recover unless the hemorrhaging of American manufacturing jobs is halted and reversed. The “service economy” is overrated. The American economy will continue to deteriorate if our dependence on imported goods continues to accelerate.

I’ve already mentioned this in this blog… See if you could get out of 1600 Pennsylvania Avenue now and then, and walk the aisles of the stores. Look at the labels and the packaging. Almost everything we’re buying is made somewhere else, usually in China. That’s our biggest problem. Pass legislation (tariffs, tax breaks, whetever) that will encourage manufacturers to produce their products in the USA.

– Sincerely,

RoutingByRumor

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Need Proof That The U.S. Economy Is In Trouble?

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Great Depression era soup kitchen in Chicago

Call it what you will

Whether you want to call it an economic slump, a downturn, a correction or a recession, the American economy is in trouble. If you want proof that the economy is in trouble, just take off your rose-colored glasses, and turn on the radio or open your local newspaper.

Advertising

I’ve noticed this trend for the last few years… Very few of the advertisements on radio are for what I consider legitimate products or services. It seems that the vast majority of radio ads are aimed at people in some sort of trouble, be it financial, legal, criminal, medical or personal. Advertising for real, honest-to-goodness consumer products are few and far between.

Every type of snake oil imaginable is being hawked on the radio. Whatever medical condition you have, there’s some miracle pill or device being advertised, and they’re all free! FREE! FREE! FREE! …that is, if you don’t count the “shipping and handling charge”. Give me a break.

Are you in debt? No problem. There are radio advertisements offering a solution to every possible financial problem. Have you ruined your credit rating? Owe money to the IRS? Have to declare bankruptcy? Creditors calling and harrasing you? Owe child support? Can’t get a credit card? Home being foreclosed? Car being repossessed? Charged with DWI? Want to sue your doctor? Want to “name a star after someone“, and waste more than $50 on absolute nonsense? No problem. Just call the 800 number, and a friendly and curteous professional is there to help. 24 hours a day. Operators are standing by. No obligation …and it’s FREE !!! …but you have to call within the next 30 minutes. Quantities are limited. Only one per household. You need to call now! Oh… and have your credit card ready.

Have your credit card ready? I thought it was free.

Regardless of the particular brand of snake oil that these commercials are offering, here’s RoutingByRumor’s Rule Of Thumb #1… The more often they repeat their toll-free phone number during the commercial, the more of a scam, or more worthless of a product it is. Another telltale sign that you’d be better off turning the dial to a different station is what I like to refer to as the “speedtalker”. The announcer, usually at the end of the commercial, that reads the fine print at about 1,000 words per minute. Some of this fine print, especially the ones done electronically, are truly hysterical. You couldn’t comprehend most of what they are saying if your life depended on it. But that’s probably their intent. So RoutingByRumor’s Rule Of Thumb #2… If they have to resort to speed-talking to give you all the legal disclaimers and other crap, turn off the radio. A legitimate advertiser will never have to resort to this nonsense. The undecipherable gibberish they attach to these ads make their entire message suspect, at least in my mind. I find it hard to believe that any advertising agency would recommend this tactic to an advertiser.

Tired of your job? Want to quit the rat race? Had it with your boss? Want to make “real” money? Only want to work part-time? Looking for financial freedom? Tired of the commute? No problem. This is a once-in-a-lifetime opportunity. You’ll make $10,000 in the first week. Then they give you the testimonials. Every one of these people are raking in the bucks. Some of them are only working a few hours a week. They can’t count all the money. They’re making money while they sleep. It’s insane how much cash you’ll make. All without investing a penny. All from the comfort of your home. While you’re in your pajamas! All without a college degree. As one of their success stories tells you, “I was skeptical, but I called the 800 number. Now, I’m earning a six-figure income”. The sky’s the limit. But you have to call now. Oh, did I mention… Operators are standing by. Then they repeat the 800 number another half-dozen times.

Just one small problem. They never actually tell you what it is they’re selling. Visit their website, and you still don’t have a clue. Call to request more info? They will send you a packet of material that doesn’t tell you what it is that will allow you to earn all that money. Chances are, these get-rich-quick offers are some form of multi-level-marketing (MLM) scam. Routing-By-Rumor’s Rule Of Thumb #3… If they don’t tell you what they’re selling, run, don’t walk, in the opposite direction.

Have an old car sitting in the driveway that you’re trying to get rid of? What’s that? It won’t start? No problemo. No keys? No title? No registration? No wheels? No engine? No problem. They will arrange a pick-up within the hour, and you’ll get a tax-deductible receipt for the full value of the vehicle. They’ll drag away that old heap regardless of the condition, running or not.

The full value of the vehicle? Exactly what does that mean? The IRS wants to know. They have been cracking down on these scams recently. Our guess is that few if any of the charities that stoop to this type of advertising are worth considering donating to. Many of the radio commercials or newspaper ads for these “charities” don’t actually tell you what type of work your “donation” will support. What we find amazing is that the word has only four letters, yet there seems to be an infinite number of ways to spell SCAM.

Now, we realize that ever since man has roamed the the planet, there have been hucksters, scammers, snake oil salesmen, crooks and get-rich-quick artists. What I’ve noticed in the last few years, particularly with radio advertising, is that ads for legitimate products and services has been largely replaced by ads for every conceivable scam and every type of snake oil imaginable. I guess broadcasters are desperate for ad revenue, so they aren’t too choosy about which ads they will accept. As long as the advertisers pay their bills, broadcasters will run the ads.

Yes, the Internet has a lot to do with it. Legitimate advertisers have many more places to spend their advertising bucks these days. However, I don’t think that accounts for most of whats going on. I think that the disappearance of what I consider legitimate advertising, as well as the proliferation of scams and snake oil, are good indicators of how much trouble the American economy is in. These types of ads, which appeal to desperate and gullible people, proliferate when the economy is in trouble. Guglielmo Marconi must be spinning in his grave.

A widening gap

We’re not economists at RoutingByRumor, but we will point out some of the indices we use when formulating our doom and gloom forecast. The gap between the wealthiest and poorest in America has never been greater (see NY Times article, MSNBC article, another NY Times article, yet another NY Times article). We doubt that the disparity between wage increases and cost-of-living increases has ever been greater. And we don’t trust the government’s unemployment figures as far as we could throw them. Spiraling energy prices are increasing the cost of goods and services across the board. If you’re lucky enough to be working, is your salary keeping pace with the cost of living? We doubt it.

Banks

The average bank savings account pays around 3.5% interest annually, interest-bearing checking accounts much, much less. Many credit card companies charge cardholders up to 36% interest on their outstanding balances, with fees that seem to continue rising without limit. Has the spread between the interest Americans earn on their bank accounts (or even Certificates of Deposit) and what they pay in credit card interest and fees ever been greater?

Investing

In RoutingByRumor’s opinion, Wall Street is a cesspool of insider trading, stock manipulation and corruption. It seems that jail time and public disgrace provide little deterrence. We think that few Americans still trust the stock market, yet Wall Street firms are earning record profits, and traders are earning record incomes. Corporations try to outdo one another when it comes to executive compensation. No compensation package, it seems, is too excessive. Even when salaries are capped, total compensation often reaches obscene levels.

Wages

Yet at the opposite end of the spectrum, many companies are paying little more to hourly workers today than they did 20 or 30 years ago, and many rely heavily on part-time workers who receive few, if any benefits. The current U.S. federal minimum wage of $5.85 an hour is a farce. The percentage gap between poverty-level income and minimum wage income is about four times greater today than it was in 1968 !!! (see statistics) Forty years ago, a single-income family of four, dependent on the minimum wage, was nearly at the poverty line. Today, that same family is nearly at half of poverty line income. Families at the low end of the economic ladder are in much worse shape today than ever. The gap between the poorest and wealthiest Americans has never been greater. The concentration of wealth has never been greater.

People are hurting

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Bread line, circa 1937

Read the newspapers. Food pantries and soup kitchens across America report a greater need than ever, even as the donations they need to operate are decreasing. At the same time, the demand for luxury goods by the wealthiest Americans has never been stronger.

Today, labor unions have little clout in America. Look no further than the American auto industry, once a bastion of labor unions. Look at how little we manufacture here anymore. Look at the trade deficit. Look at the illegal immigration problem. By the way, don’t believe them when they tell you that making it more difficult to get a driver’s license will solve the illegal immigration problem, or the terrorism threat. Don’t believe them when they tell you that making it harder to smuggle people or drugs, or anything else across the border will solve anything. Did it ever solve the drug problem in the United States? If you sent every single illegal Mexican home tomorrow, it would make little difference to our economy. Virtually everything sold in this country is being imported. That’s where all the jobs have gone. To China and every other low cost producer in the world. Not to Mexico. People feared NAFTA. I think it has had little impact on the American economy compared to the flood gates that have been opened to imports from Asia.

Wal-Mart advertised they were hiring workers for their new store Avondale Estates, Georgia. Walmart wages and benefits are widely considered among the worst in America, yet this week, 10,000 people showed up hoping to get one of the 400 jobs available at this Wal-Mart (see this Atlanta Journal-Constitution Article). Was it this bad during the great depression?

But don’t take our word for it

Think we’re all wrong about this stuff?

Just turn on the radio, and count the number of “real” products or services you hear commercials for.

Open the newspaper, and try to find a decent paying job (or any job at all).

Try to sell your home (or try buying a home). Good Luck !!!

Ask yourself if you’re in as good financial shape as you were a year, five years, or ten years ago.

Worried about being able to afford health care?

Worried that you’ll never be able to retire?

Worried about pulling into the gas station and saying “fill-er-up”?

Worried about the cost of heating the house this winter?

Worried about layoffs?

Worried about the war?

Still think the economy is doing well?

– RoutingByRumor

( 1/18/2008 update: See our related article, entitled “Dear President Bush…“)

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