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Source: (consider it) Thread: Recession
HCH
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# 14313

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Huffington Post today has a story proclaiming that the next recession is coming within the next three years and that it will be quite bad (in the U.S.).

Let's try not to blame anyone. How can one know a recession is coming, and what can one do about it in advance? (Anyone who has a good answer is necessarily smarter than most experts.)

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Crœsos
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# 238

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quote:
Originally posted by HCH:
Huffington Post today has a story proclaiming that the next recession is coming within the next three years and that it will be quite bad (in the U.S.).

I assume you mean this article?

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Humani nil a me alienum puto

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Brenda Clough
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# 18061

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Economic recessions seem to be a natural part of the business cycle. Like tornadoes, they cannot be avoided.
As to preparing for them, it would be prudent to not rack up huge national debt, so as to have resources to hand when you need them to lighten the impact of the downturn. Which is to say that the US is in deep deep kimchee.

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Crœsos
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# 238

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quote:
Originally posted by Brenda Clough:
Economic recessions seem to be a natural part of the business cycle. Like tornadoes, they cannot be avoided.

Yes and no. The last two U.S. recession were precipitated by the bursting of economic bubbles. In the case of the 2007-2009 recession it was the collapse of finance due to over-valued mortgage-backed securities. A different regulatory environment might have prevented it, or at least mitigated it. In the 2001 recession the over-valued commodity was dot-com stocks. These seem different and more avoidable than recessions driven by things like oil shocks (the 1973-1975 and 1981-1982 recessions).

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Humani nil a me alienum puto

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HCH
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# 14313

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Yes, that is the story

I was not actually thinking of this at the national level, but at the individual-citizen level.

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Boogie

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# 13538

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Buy gold?

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Brenda Clough
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# 18061

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You could pay off as much debt as you can, and avoid acquiring more. When you've done that, you could save your money, diversifying your holdings as much as you can. But there's not a lot you can do in advance to prepare for if your real estate suddenly crashes in value, or if your employer folds.

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Ian Climacus

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# 944

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I'm always a bit suspicious of the town criers of doom. I do not doubt recessions are cyclical, and one will come again, but there seem to be many people who make their lives promising recessions are around the corner, only to be proven wrong.

All I can do is try to have some savings. I could be fired or made redundant when one comes, and there is not much one can do about that.

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Sioni Sais
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# 5713

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quote:
Originally posted by HCH:
Huffington Post today has a story proclaiming that the next recession is coming within the next three years and that it will be quite bad (in the U.S.).

Let's try not to blame anyone. How can one know a recession is coming, and what can one do about it in advance? (Anyone who has a good answer is necessarily smarter than most experts.)

These things vary from country to country, but are we out of the last one? I mean the 2007-2009 "Credit crunch" caused by greedy lenders. btw, that was predicted, but those who did so were shouted down as prophets of doom.

Britain certain hasn't recovered. I'll leave others to apportion blame, or should that be responsibility. Any subsequent recession will no doubt make things worse still, but at least an international recession will suppress the notion that Brexit has caused any damage.

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"He isn't Doctor Who, he's The Doctor"

(Paul Sinha, BBC)

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HCH
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# 14313

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According to the article:

"The current economic expansion began in mid-2009, making it the third longest in history, and it can’t last forever."

In the U.S., at any rate, we certainly have long since emerged from the last recession (as a whole; some parts of the country have not). The stock market has reached record highs and there have been many months of job growth.

Of course, you can argue that this is a fake, as infrastructure maintenance has been largely ignored and vast amounts have been spent on land wars in Asia. However, the point here is not to lay blame but to find a way to predict the event and make preparations.

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Sipech
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# 16870

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One of the signs, though by no means bellwether, is the falling value of a country's currency. Back around 2007, the Icelandic banks were offering some of the best returns on ISAs. Interest rates may be interpreted as a measure of risk, so the fact that they were high already could count as an indicator that the Icelandic economy was a riskier investment at that time. But as part of my job as an accountant, I would monitor and report on various currencies. I spotted the Icelandic Krona was falling in value and issued a warning around spring 2008. A few months later...
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Crœsos
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# 238

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quote:
Originally posted by HCH:
According to the article:

"The current economic expansion began in mid-2009, making it the third longest in history, and it can’t last forever."

In the U.S., at any rate, we certainly have long since emerged from the last recession (as a whole; some parts of the country have not). The stock market has reached record highs and there have been many months of job growth.

Well, "emerged" is a relative term. The last recession ended in June 2009 according to the National Bureau of Economic Research (NBER), the semi-official arbiter of such things. But that just means that June 2009 was when the American economy started growing again, not the point at which it had recovered to its previous, pre-recession level. By my personal calculations (based on BLS labor data) employment only crossed it's pre-recession trajectory (which was slightly downward) sometime around December 2015.

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Humani nil a me alienum puto

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rolyn
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# 16840

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Following the 08 debacle we were supposed to see Greece fall into a line of dominos thus breaking the Euro. Didn’t happen. Then the China economy was going to go pop, also didn’t happen. Since then it’s Brexit, Trump, and doom fodder aplenty with the sky still remaining in the place God intended.

I see little reason to believe this latest offering from the scare factory isn’t just wheelers and dealers out to make a few quid by rattling the henhouse door.

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Change is the only certainty of existence

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LutheranChik
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# 9826

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Except that the proposed US budget, if passed, would cause a giant contraction of the population continues as money is sucked out of much of flyover country, whose communities are economically dependent on direct or indirect government spending.

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Simul iustus et peccator
http://www.lutheranchiklworddiary.blogspot.com

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Brenda Clough
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# 18061

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We must comfort ourselves with the reflection that Crooked Don's budget is very nearly meaningless; it certainly will have no effect on the US budget, which was passed by Congress last week. A commentator today on NPR said that a president's budget is something like the advice that parents give to their adult children. The kid says, "Yeah, mom, sure," and keeps on doing what she likes.

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Tortuf
Ship's fisherman
# 3784

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quote:
Originally posted by Boogie:
Buy gold?

I know some folks who were preparing for the collapse of society/recession by buying MRE's (Meals Ready to Eat), gold and guns. Evidentially, the idea was that they could survive on their MRE's and buy what they wanted with their gold - shooting anyone who tried to take their food or gold as they had only a limited supply of both. More food seemed implausible as it is hard to hunt with semiautomatic pistols and they had no idea how to grow vegetables.

They got the idea, and the MRE's, through their church.

If you think about it though, gold only has value because we think it does. It used to be spices and silk in addition to gold. Plus, how are you going to buy something small with a gold bar? Maybe you could get a gold bar slicing tool from Amazon.

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simontoad
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# 18096

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I'd like to stress Croesus' point above, which was that proper regulation of business can mitigate or avoid some types of economic downturns.

I think its important to emphasise this because the idea that capitalism leads to inevitable downturns masks that there are things which can be done.

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Human

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no prophet's flag is set so...

Proceed to see sea
# 15560

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My province has been in recession for 3 years. We had a resource boom with the conservative and farthest right government we've had in 30 years so the same spend everything from the boom years, just like it's prior incarnation. My general impression is that the right wingers cause these things by pretending booms are their fault versus understanding the business cycle and they ideologically assume they're geniuses about the economy.
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Callan
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# 525

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quote:
Originally posted by rolyn:
Following the 08 debacle we were supposed to see Greece fall into a line of dominos thus breaking the Euro. Didn’t happen. Then the China economy was going to go pop, also didn’t happen. Since then it’s Brexit, Trump, and doom fodder aplenty with the sky still remaining in the place God intended.

I see little reason to believe this latest offering from the scare factory isn’t just wheelers and dealers out to make a few quid by rattling the henhouse door.

That reminds me of the joke about Marxist economists predicting 19 of the last 7 recessions. Nonetheless they do happen, from time to time. Given that the management of the economy in at least two of the worlds largest economies is not exactly in competent hands I think that a certain amount of pessimism may be in order.

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How easy it would be to live in England, if only one did not love her. - G.K. Chesterton

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Sioni Sais
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# 5713

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quote:
Originally posted by rolyn:
Following the 08 debacle we were supposed to see Greece fall into a line of dominos thus breaking the Euro. Didn’t happen. Then the China economy was going to go pop, also didn’t happen. Since then it’s Brexit, Trump, and doom fodder aplenty with the sky still remaining in the place God intended.

I see little reason to believe this latest offering from the scare factory isn’t just wheelers and dealers out to make a few quid by rattling the henhouse door.

Whatever is or isn't happening in national economies or the global economy regarding GDPs and the stock markets, income inequality just about everywhere continues to increase, so while the rich are coming out of recession nicely, those less well off are coming out of it far more slowly if at all. It has been like that for nearly forty years now.

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"He isn't Doctor Who, he's The Doctor"

(Paul Sinha, BBC)

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simontoad
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# 18096

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Australia hasn't had a recession since the mid-1990's. Even during the GFC we had very slow growth. Our big problem is house prices and its effect on housing affordability for renters, especially those on welfare, and people looking to buy their first home. The price of real estate hasn't fallen in the lifetime of my 80 year-old-mother, apart from the occasional drop which rights itself very quickly. This makes the periodic warnings of a bubble hard to take seriously. Yet my ex-rental house built in the early 1980's in a country town has more than doubled in value in the last 10 years. That shouldn't have happened.

You can get a stamp duty exemption in Victoria for a first house purchase of up to $600,000 if its your first home. $600,000 would have bought you a very nice house in a great area 10-15 years ago. My great fear is that interest rate rises over the next decade are going to murder allot of people.

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Human

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cliffdweller
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# 13338

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quote:
Originally posted by Tortuf:
quote:
Originally posted by Boogie:
Buy gold?

I know some folks who were preparing for the collapse of society/recession by buying MRE's (Meals Ready to Eat), gold and guns. Evidentially, the idea was that they could survive on their MRE's and buy what they wanted with their gold - shooting anyone who tried to take their food or gold as they had only a limited supply of both. More food seemed implausible as it is hard to hunt with semiautomatic pistols and they had no idea how to grow vegetables.

They got the idea, and the MRE's, through their church.

If you think about it though, gold only has value because we think it does. It used to be spices and silk in addition to gold. Plus, how are you going to buy something small with a gold bar? Maybe you could get a gold bar slicing tool from Amazon.

I think you forgot the airquotes around "church"

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"Here is the world. Beautiful and terrible things will happen. Don't be afraid." -Frederick Buechner

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Brenda Clough
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# 18061

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In my area the worst case of 'preparedness' was undertaken for fear of Y2K. Remember that, how civilization was supposed to crash on January 1, 2000 because all the computers couldn't handle the transition to a year that began with a 2? A guy with a big house in McLean, VA (where the rich people live) decided to prepare by switching his house to propane, so that when the electrical grid went down he'd have heat. He had the yard dug up and huge propane tanks installed deep underground, and switched his furnace, water heater, etc. to propane. The entire renovation must have cost a fortune. And, of course, nothing happened. His house is unsaleable now.

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Arethosemyfeet
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# 17047

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What I find amusing is that MREs are known for causing constipation and shouldn't really be relied on for an extended period of time.
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jbohn
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# 8753

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quote:
Originally posted by Arethosemyfeet:
What I find amusing is that MREs are known for causing constipation and shouldn't really be relied on for an extended period of time.

A friend of mine (ex-U. S. Army) refers to them as "Meals Refusing to Exit".

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We are punished by our sins, not for them.
--Elbert Hubbard

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Sioni Sais
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# 5713

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quote:
Originally posted by jbohn:
quote:
Originally posted by Arethosemyfeet:
What I find amusing is that MREs are known for causing constipation and shouldn't really be relied on for an extended period of time.

A friend of mine (ex-U. S. Army) refers to them as "Meals Refusing to Exit".
Some years ago I read that they were known as "Meals Rejected by Ethiopians" (there was a famine thereabouts at the time).

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(Paul Sinha, BBC)

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Crœsos
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# 238

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Remember when Donald Trump took credit for the Dow crossing the 25,000 mark? He must be really hard at work today, because the Dow crossed the 25,000 mark three time today, twice in the positive direction and once in the negative.

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Humani nil a me alienum puto

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Golden Key
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# 1468

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Brenda--

quote:
Originally posted by Brenda Clough:
In my area the worst case of 'preparedness' was undertaken for fear of Y2K. Remember that, how civilization was supposed to crash on January 1, 2000 because all the computers couldn't handle the transition to a year that began with a 2? A guy with a big house in McLean, VA (where the rich people live) decided to prepare by switching his house to propane, so that when the electrical grid went down he'd have heat. He had the yard dug up and huge propane tanks installed deep underground, and switched his furnace, water heater, etc. to propane. The entire renovation must have cost a fortune. And, of course, nothing happened. His house is unsaleable now.

I respectfully disagree about nothing happened.
Here's the "Documented Errors" section of Wikipedia's "Year 2000 Problem" article. And, as a another part of the article says, these are just the problems that were reported and documented.

I worked on Y2K. A lot of things the company managed could have failed, injuring or killing people, if we hadn't put in so much hard work.

The guy you mentioned could probably sell his house to some sort of prepper or off-the-grid person. And, per news reports, many rich people have set up their own hidey-holes, just in case of any trouble.

Saying nothing happened and it was all hogwash (not a quote from you) is kind of like saying a supposedly weak dam didn't fail, so there was never anything to worry about. Never mind all the people who repaired and reinforced the dam.

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Blessed Gator, pray for us!
--"Oh bat bladders, do you have to bring common sense into this?" (Dragon, "Jane & the Dragon")
--"Oh, Peace Train, save this country!" (Yusuf/Cat Stevens, "Peace Train")

Posts: 18561 | From: Chilling out in an undisclosed, sincere pumpkin patch. | Registered: Oct 2001  |  IP: Logged
wild haggis
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# 15555

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It may sound simplistic: but until we stop the rich getting richer and selfishly hoarding their money while the poor get poorer, the situation of recession ups and downs will never change.

When young people in Britain earning good salaries can't afford to buy a small house, yet there are more rich people in the world today than ever before...........people who buy multiple houses and leave them empty. Landowners who want to make as much money as they can and to hell with everyone else.

What has happened to Christian teaching? I find it weird that some people who say they are Christians just want to get richer and richer, hoarding their money and buying luxuries, while a mile away there are people in abject poverty who work themselves to death, often employed by the rich; not only in USA but I have noticed it seems that the rich/poor gap very prevalent there and now developing in Britain.

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wild haggis

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Crœsos
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# 238

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quote:
Originally posted by wild haggis:
It may sound simplistic: but until we stop the rich getting richer and selfishly hoarding their money while the poor get poorer, the situation of recession ups and downs will never change.

When young people in Britain earning good salaries can't afford to buy a small house, yet there are more rich people in the world today than ever before...........people who buy multiple houses and leave them empty. Landowners who want to make as much money as they can and to hell with everyone else.

Here's an editorial by some relatively high-level economists arguing that huge inequalities of wealth and income isn't just some natural thing that happens in a capitalist system but rather the result of deliberate policy choices.

quote:
Comparing the divergent paths of the United States and western Europe, for example, we see that it is possible for institutions and policymakers to tame the unequalising forces of globalisation and technological change. And it is also possible to unleash those forces with renewed vigour, as in the case of the latest US tax plan.

In 1980, both sides of the Atlantic showed similar levels of inequality. Since then, however, the gap between the richest and the rest has surged in the US, while in western Europe it has increased only moderately.

In both regions, the top 1% of adults earned about 10% of national income in 1980. Today that cohort’s share has risen modestly to 12% in western Europe, but dramatically to 20% of all income in the US. The good times have rolled especially fast for those at the very top in the US, with annual income booming by 205% since 1980 for the top 1%, and by 636% for the top 0.001%.

But this boomtime at the very top has not benefited the rest of the American population in any measurable way. The average annual wage of the bottom 50% has stagnated since 1980 at about US$16,000 per adult (after adjusting for inflation and before taking into account taxes and transfers). It’s a tale of two countries: the top half has been growing at roughly the same rate as China, while for the 117 million American adults in the bottom 50%, income growth has been nonexistent for a generation. In western Europe, by contrast, incomes of the bottom half have matched overall economic growth over the last quarter of a century.

The rest is their explanation for the causes of these different outcomes and is well worth the read for anyone with an interest in the topic.

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Humani nil a me alienum puto

Posts: 10699 | From: Sardis, Lydia | Registered: May 2001  |  IP: Logged
rolyn
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# 16840

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Evidence does point that recessions are a tool of Capitalism. It could be said they are desirable for those with loadsamoney, this sector knows that each time a temporary suppression of economic growth occurs it will always be rewarded with increased dividends once it has passed.

On the news today it said that in 1996 65% of those on middle incomes could afford a house, whereas now it is 27%.
Landlords are doing very nicely, and without rent caps their grip on the housing market increases with every recession.

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Change is the only certainty of existence

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