"A Very Accident Prone Economy"

(I took that phase instead of the editorial title because it is an evaluation of so much of America. A thread bare economy, polity, environment, social structure, everything from human relations to physical infrastructure, seems just one jolt from falling apart.0

http://select.nytimes.com/2005/11/27/business/27gret.html


After the Debt Feast Comes the Heartburn


By GRETCHEN MORGENSON
Published: November 27, 2005

DOES a financial train wreck lie dead ahead for American consumers and investors? Paul Kasriel, chief economist at the Northern Trust Company in Chicago fears as much. He reckons that even a mild recession next year could spiral into something ugly, given the combination of rising interest rates, off-the-charts consumer debt and a cooling housing market.

"We have a very accident-prone economy," Mr. Kasriel said. "We have the most highly leveraged economy in the postwar period, and the Fed is increasing rates. In the past 30 years or so, whenever the Fed has raised interest rates, we've quite frequently had financial accidents."


snip

Here's a stunning figure: In the third quarter of 2005, Mr. Kasriel calculates, households spent a record $531 billion more than their after-tax earnings, on an annualized basis.

These nonstop shoppers have propelled consumer spending to a record high as a share of gross domestic product - 76 percent in the third quarter, Mr. Kasriel said, up from 73 percent in 2000.

snip

just one major slip and the whole thing comes down. I don't understand these people who are out spending all this money they don't have. The Malls around chicagoland didn't look to full of hyper-affluent shoppers this weekend....and housing is slowing up too. For sale signs on homes in this area are sitting, not moving like they did.

Don't forget to check into the Illinois section, and I too thought the stores were no busier than any other weekend.

I'll check into the IL section.

Just as land-destroying agricultural practices have been challenged by the theory and practice of Sustainable Agriculture, and environmentally destructive fossil fuel industries by the implementation of Renewable Energy, and while Consumerism quails at the Simplicity Movement, the Growth is King economists and business culture will have to give way to the craving and need for a Sustainable Economy: one that maintains a healthy standard of living for all the members of society. There may not be any billionaires in such an economy, but there won't be any destitution, either. The arts and crafts will not be orphans in need of charity, there won't be any unemployment insurance because there won't be unemployment, and teachers, scientists, aritsans and other creators of real wealth will be honored and encouraged by the regard they earn for their efforts. The legal fiction of Corporate Citizenship will give way to a practical integration of corporations into the mix of activities of real people doing real work, under oversight by the people who work for them and the customers who buy their products--not by absentee-landlord shareholders. Marketing will become a hobby, advertising more like news and less like entertainment.

It is the only way humanity will make it to the 22nd century.