The Falling American Economy

[Rising_Sun]

@Drake

Only this time there won’t be such a rebound. The people in 1929 ff were in a vastly better position than what we are in.

But governments then worsened things by doing the exact opposite of what they’re doing today.

It remains to be seen whether the current interventions will balance the different circumstances today.

[BriteLite]

@Rising_Sun

Greenspan’s position seemed to be that he expected that a sense of institutional self-preservation would ensure that CEOs would be prudent to ensure that their corporations survived, rather than exploiting the corporations to profit themselves.

What he failed to see, which suggests that like any economic or other zealot he must have been blind to human nature and corporate behaviour, was that CEOs have been rorting their corporations for the past few decades to generate short-term appearances of profit by any means possible to ensure that they got their performance bonuses and increased the stock value so they could exercise their stock options.

I agree that no individual can be blamed for the current problems, but the class of individuals who should be blamed most are the rapacious CEOs and senior managers of corporations all over the world whose greed is most responsible for the mess. They are the modern robber barons but, unlike the nineteenth / early twentieth century robber barons the modern lot don’t put their own capital on the line and they can’t lose, so they lack the restraint that is involved in using one’s own money. If stocks go down they don’t exercise their options and if they go up they do, but meanwhile they’re paid silly amounts every day they’re in office.

In the early 1980s I was in a senior position in a major Australian capital institution. Our CEO was an old school man who drove his own modest company car when CEOs of comparable and lesser companies were starting to use company funded chauffeur driven limos. Our CEO always stressed the point that the corporation was, effectively, the trustee of the shareholders’ funds and he judged every decision against what was genuinely in the best interest of the shareholders, which included looking at long term growth rather than current year manipulation of figures to impress the market and give himself a bigger bonus while buggering the long term future of the company. After he retired the next CEO was less concerned with that approach, and the next couple of CEOs got well into the short term aims. A major company which had been around for over a century got taken over a few years later by a foreign corporation, and what’s left of it has never been half as good since as it was under the old school CEO.

The ceo types get their share of blame also. I was in mid level management in the 90’s. Our ceo though in his late 60’s was anything but old school. He drove 3 company cars(cheapest was a Cadillac), was famous for spotting new young female secretaries and started every meeting with “We are not making any money” translated to mean " Where is my bonus?". He surrounded himself with yes men and by 2002 the company was in bankrupty.

Is it fair to say that this story and others similar to it are one of the problems in American business? I think so. All too often upper management treats investor funds like a virtual free bufett arranged for them to further personal portfolios. Yes they are a huge part of the problem.

The politicians get my “finger” award. Elected officials allowed the “fat cats” to take the American economy where it is today. This is a crime in itself. Retirement funds alone have lost 2 Trillion dollars recently. I don’t know that anyone could factually calculate total losses from this recent implosion.

My point being the elected political arm is entrusted with the well being of the constituency. This trust has been violated and rather than ensuring this didn’t happen the politicians have become part of the issue.

“Criminal” to my thinking.

[Rising_Sun]

@BriteLite

My point being the elected political arm is entrusted with the well being of the constituency. This trust has been violated and rather than ensuring this didn’t happen the politicians have become part of the issue.

It was bound to happen as the politicians are dependent upon business for donations for their election campaigns and, in various other ways such as avoiding negative publicity from media moguls or getting positive support in business circles, are subject to influence and or control (often willingly) from business.

And that’s a problem in just about every Western nation, not just America.

The other problem is that all the corporate crooks are part of the same scam. The superannuation (pension in US) fund managers who hold the bulk of votes in major corporations aren’t going to do the right thing and vote down excessive board, CEO, and management team salaries and benefits because their own salaries and benefits are linked to them in the same market. They’d be nuts to put a stop on their own ‘market’ incomes.

Meanwhile the small shareholders who often by total number but not toal number of voting shares outnumber the superannuation funds and other professional investors get screwed royally.

[BriteLite]

@Drake

A total collapse crash had already been programmed since 1971 with the final dissolution of any physical standard. I don’t know if this is it yet, but it smells like it. Our money system is based on exponentially growing debt (seriously, how stupid is that, I am always stunned that the people who actually work in that system seem to believe this can go on indefinatly because it worked a couple of decades). It is bound to fail big time in the end. Complete failure of the money system is already bad if it only happens locally (like our hyperinflation), but since we now essentially live in one world this final reset will be more ugly than anything we have ever experienced.

The chinese sure know how to curse. May you live in interesting times.

Good points Drake. No gold standard=everything is paper backed. If problems are encountered we can print more money. Geesh

The US has been setting a fine example for others to follow. A country can spend more than it has funds to back up. We are not required to achieve budget numbers. We can spend as much as we want. Perfect. No down side.

The world problem is as you described. Like it or not the world economy is tied together now. If one fails we all fail.

Hmm I suppose this is not just a US problem.

[Rising_Sun]

@herman2

My Dollar sank to 79 cents!..BooHoo Hoo…there use to be a day only 6 mths ago that the USA Greenback was lower than the Canadian dollar. …I use to walk with Pride in Buffalo laying my high paying Dollar on the table for Buffalo wings and fee rich…now I can hardly afford the gas to go to the States and if I do, I’m getting 20% less!!!..It’s not fair I tell you!

Lucky you!

Our dollar was around 98c to the USD a few months back and it’s gone as low as about 65c lately, and it costs us a lot more to get to Buffalo than you.

[herman2]

I went to the bank yesterday to exchange my dollar for American money as I am going on a trip (it’s in january and i will be away for a mth). I know I will be missed and i apologize to my fans for being away, but )…anyways my question is that the bank gave me a 5 note with the number 5 being in color!. I think it is counterfeit, as American money has no color. The bank stated it is not. If there are any Americans who could tell me about this, I would be gratefull. I thought American money isn’t suppose to have color?? OH, and if your ever exchanging money on Toronto, I tell you it’s impossible to get one dollar bills. The most I could get was 3. I went to 3 different banks and they all told me they have no one dollar bills. So how the hell am I suppose to tip anyone as Canadian money has no one or two dollar bills. the only paper bill is a 5 and I’m not ready to tip a 5 note. Oh brother…anyways about the colored 5 American note–is it fishy or real?..anyone???

[mike_M]

No worrys…Its real.

[herman2]

thanks Mike!:army:

[Rising_Sun]

@mike_M

No worrys…Its real.

This is going to deprive Americans of yet another area of superiority to the rest of the world.

Americans have always been able to insult Australians by pointing out that Americans don’t need their currency in different sizes and colours to work out the different denominations, but it looks like that advantage is about to disappear.

[navyson]

I actually don’t mind a little color on our paper money. I do think it’s silly to have one of the denominations numbers being extraordinarily large and in the $5 bills case it’s colored purple. Makes it look like toy money.

[Panzerknacker]

Some years ago with 5 dollars you can had a very decent meal around here, today with the same bill you cant have anything “decent”.

[navyson]

@Panzerknacker

Some years ago with 5 dollars you can had a very decent meal around here, today with the same bill you cant have anything “decent”.

Same here, now you can barely get crappy McDonalds type fastfood for that.

[flamethrowerguy]

Sounds familiar, for 5 Euro I get about the same amount of goods as for 5 Deutschmarks 7-8 years ago (exchange rate has been about 1 Euro = 1.95 Deutschmarks).

[tankgeezer]

American currency in different colors will make it more difficult to err in making payment, Though its really designed to foil counterfeiting. It would be good to have different sizes so that blind folks can more easily use it, and make bleaching $1 notes to reprint as $100 notes more tricky. (no one really checks the security strips)
If you have a note, and are not sure if its real, look in the white areas of the “paper” its cloth really, linen and cotton. In the white areas, you will on a true note, find red, and blue fibers mixed into the others. these are called “Hairmarks” so the note is Red,White&blue. These cant be duplicated by copiers etc, so thats a good quick check to use.

[herman2]

I ll never understand why the Americans still have the One Dollar bill. When I went to Germany over 25 yrs ago, they had the 5 Mark coin already. Canada discontinued the 1 and 2 dollar note several yrs ago. Although there hasn’t been a 2 note in the States for over 20 yrs I believe, I am curious why USA with such a big population doesn’t use the coin method instead of 1 notes?. I heard they tried it with the Susan B Anthony coin many yrs ago but then that never was a hit. Personally I like 1 and 2 notes. they make easier tips for the strippers, as putting coins in their G-strings is cumbersone and a five note is a bit much:)

[mike_M]

@herman2

I ll never understand why the Americans still have the One Dollar bill.

Personally I like 1 and 2 notes. they make easier tips for the strippers, as putting coins in their G-strings is cumbersone and a five note is a bit much:)

Doesn’t that answer your own question??

[tankgeezer]

One could always write a check on a beer coaster, cocktail napkin,(or piece of bacon if in Canada.) this is perfectly legal, at least in the U.S. No cheating and using disappearing ink now.

[Drake]

Or you could do it like the Casinos, just introduce the paper equivalent to chips. In the normal environment I think coins are more practical than small value dollar notes, and if it’s just because they’re way more robust.

[tankgeezer]

The trouble with the few types of dollar coins tried by the U.S. mint is that they are all about the same size as a quarter dollar coin, though thicker. This lead to problems when people would mistakenly put them into vending machines which are not set up to handle them, resulting in a jammed machine, and loss of a dollar to the consumer. Also, many businesses would not accept them as their registers had no place for them to go. They were very unpopular, and most ended up in storage at the mints. These coins were sometimes given as change by post office clerks just to force them into circulation. Eventually,I imagine they will take root, but dont hold your breath.

[Panzerknacker]

Personally I like 1 and 2 notes. they make easier tips for the strippers, as putting coins in their G-strings is cumbersone and a five note is a bit much

:mrgreen:… good one.