economy

The service and asset based "New Economy" didn't work out so hot

Now what?

It sounded good on paper: Globalization meant that un-developed economies could become developing economies by manufacturing the things that would be needed in developed economies. Developed economies would provide services and capital to manage and fund new manufacturing and resource extraction enterprises in the Third World. A rising tide would lift all boats. The theory behind the New Economy made some sense. Read it all

Armageddon now officially underway

[This is the third of a three-part series on getting the economy humming again. It will make more sense if you read Parts I and II before this one.] Read it all

Talk of an auto industry bailout has been crazy. Bush says he wants to make sure that taxpayer money is paid back. Repugs are saying they want to take it slow and make sure they do it right. If only they had been so prudent before rushing us into an unnecessary war that ended up bankrupting us. Who really gives a crap what the Worst President in History has to say about anything at this point? Read it all

It's the holidays. If you're skating on thin ice like most Americans, you might be thinking about cutting down on your spending this year. Whether you act on those thoughts remains to be seen. If people do curtail spending this year, the hit to retailers will put a lot of jobs in jeopardy, not just crappy retail jobs, either. Retailers have suppliers. Suppliers have distributors and shippers. Distributors and shippers buy from (mostly) overseas manufacturers. Real people work in every step of that chain. Read it all

As explained in Part I, the economy can be thought of as an organism with a number of vital organs and some non-vital organs that are still nice to have (such as the gonads of the economy -- the entertainment industry). If any one of the vital organs fails, the organism will die. Read it all

[This is the first installment of a three-part plan to restore America's economic health.]

Over the past ten years, I've spent a lot of time explaining why the economy was doomed. That is no longer in question. Economic health depends on real goods and services being produced and consumed by as many people as possible, not on numbers in Wall Street computers. The numbers are important, as I will explain later, but only insofar as they reflect the reality of wealth creation. If real wealth is deteriorating, it doesn't matter what the numbers in the computers are doing. Read it all

What if Wall Street threw a party and nobody came? It wouldn't be so bad. Those parties suck anyway -- too much coke and too many hookers and not enough intelligent conversation (or... wait... maybe the parties aren't that bad. It's the work that sucks.). Read it all

Financial crisis aside, the markets were up sharply on the date of this post. It means nothing. I stand by my previous gloomy financial predictions. Things are totally screwed up and we're headed for a time of intense, painful change. All change is painful, but it's also necessary and good. I have personally experienced major life changes on several occasions, and they've always turned out for the best because I've always planned and prepared for all contingencies and known going in that the change would entail discomfort.

Make no mistake about it: this current state of financial meltdown will lead to change that we will all see in our day-to-day lives. It will be bad at first, but it will turn out for the best. Read it all

The $150 billion $165 billion "economic stimulus" package will pass, providing a little boost for the economy, a little snort of cocaine to keep the delusion of economic health going for a little longer before the inevitable crash. It won't work. It might help fight off sleep for a little while, but its main effect will be to make the hangover worse. No, this economy is not healthy. It has not been healthy for ten years, just high as a kite. Read it all