SOMEWHERE IN CALIFORNIA – Friday, November 21, 2008 – Janice’s life as she’d known it for more than twenty years ended last Friday.
The end came as a total surprise on what she expected would be another challenging but rewarding day at the job she loved almost as much as she loved her husband and their daughter.
Forty-six year old Janice had been an account executive since the summer of 1986 for a small but successful ad agency. She was responsible for managing print advertising for a regional association of car dealers. She considered her customers to be family and thoroughly enjoyed every opportunity to help them sell as many cars and trucks as their markets could absorb.
Janice had been at her desk for about an hour, working on her schedule for the following week, when the owner of the agency, Marilee Banacek (not her real name), came in and asked a rhetorical question, “Got a minute?”
“Sure do,” Janice said, waving Marilee in with a smile. “What’s up?”
Marilee bit her bottom lip, looked away for a long moment, then sat in a chair in front of Janice’s desk and said, “There’s no easy way to say this, so I’m just going to tell you, straight out: I’m shutting down the business.”
“What? Shutting down the business? I know things are tough, but . . . ”
“The factory just announced it’s cutting off funding for co-op advertising.”
“Is this temporary or . . . “
Marilee sighed, “I got an Email early this morning announcing that, effective immediately, the factory has terminated all projects and canceled all progress payments.”
“All projects, all progress payments?” Janice asked.
“Yup,” Marilee said. “All projects and all progress payments, including last month’s check and the check we were supposed to receive next week. I’m maxed out on my credit cards, American Express has been calling, and I’m upside down on my house. With this credit crunch, I can’t borrow any more to keep things going. So, after thirty-two years of working six and seven day weeks to build this business, I’m 64 and broke.”
A couple hours later, after a series of tearful hugs and promises to keep in touch with 11 other good people who’d also lost their jobs through no fault of their own, with a small box of personal items in the back seat of her year-old Ford Fusion, Janice pulled away for the last time from the building she’d come to consider a second home.
As she headed out in traffic, all she could think of was how her husband, Tim, would react when she gave him the news.
Tim owned a small head-hunting company and business had been lousy for the last several months. He hadn’t billed a placement since August and still hadn’t collected that fee. With no money coming in, he’d been forced to lay off three assistants, and, for the first time in the twenty-six years he’d owned his own business, he was seriously thinking about closing down the office and looking for a job – any job – just to bring in some money to augment Janice’s paycheck.
For the first time in their twenty-three year marriage, Janice and Tim were forced to tap into savings to pay the monthly bills . . . Visa and MasterCard, mortgage payments, and loans on Janice’s Fusion and Tim’s two year old F150.
After deductions for taxes and health insurance, Janice’s $50,000.00 annual salary barely paid for essentials like food, clothing, utilities, and university tuition for their nineteen year old freshman daughter, Kimberly.
As Janice drove home, she realized that even though Tim had always provided primary support for the family, the simple fact that she could count on a paycheck every other Friday, provided a level of security she wasn’t sure she could live without. She also realized that not only had she lost a job, she’d also lost a group of friends she’d known and worked with for two decades; good people who provided a level of emotional support she certainly didn’t want to give up.
She walked into her house and realized that everything, while actually the same, looked different . . . she’d never seen the familiar through the eyes of someone who was completely useless, someone who was unable to contribute to anyone or anything.
Janice realized that her only challenge now was to get her emotions in check. She didn’t want Tim to see her like this. He had enough problems; he didn’t need to watch his wife come unglued.
Thank goodness, Janice thought as she cried herself to sleep on the living room sofa last Friday afternoon, Kimberly’s not home to see me like this.
Copyright © 2008 by l.t. Dravis. All rights reserved.
If you have questions, comments, or concerns, Email me at LTDAssociates@msn.com
(goes right to my desk) and since I personally answer every Email, I look forward to hearing from you soon.
With each cycle of the income crisis negative feedback loop an accelerating economic decline moves the global economy spiraling downwards into an abyss that will eventually end in total economic collapse. Systemic declining real wages starting over 40 years ago has laid the fragile foundation that fed a continuing drop in consumption when credit could no longer be a sustainable proxy for income among low to middle wage earners. Even if credit was suddenly available - average Americans are already highly over leveraged. These factors triggered a negative feedback loop of declining real income available to 95% of the citizenry, falling consumption directly proportional to falling incomes, and declining business revenue accompanied by job lay-offs & retail price declines (deflation) all completing each successive feedback loop cycle. All along the course of the feedback loop cycle theses effects oscillate across the general economy in a continual downward slope of economic decline that translates into falling GDP and national capital stock destruction that occurs at an ever increasing exponential rate.
Reversing an income crisis 'drain spiral' becomes more difficult with the passage of time since unemployment and capital stock destruction exponentially increases across a number of income crisis negative feedback loop cycles. The longer a government waits to enact substantial fiscal stimulus targeted at low to middle income citizens the more and more 'income emaciated' these citizens become thus making it much more difficult to push the entire economy up out of the income crisis spiral.
Eventually, the nation's capital stock becomes so inconsequential from an economic perspective and the number of citizens who are unemployed so numerous that the government becomes the sole income generating agent (presumes the government has infused the economy with insufficient fiscal stimulus and/or is still making government expenditures into the private sector) in an extinct standalone private economy that has reached the terminus in an income crisis deflationary economic spiral.
Reaching the terminus point is a foregone conclusion without substantial (10% of GDP) government fiscal stimulation of the 'real' economy. At this terminus point economic activity in the country has been completely extinguished from successive negative feedback cycles down economic gradients with ever accelerating declines in GDP and national capital stock destruction.
Infusing the supply side (financial sector - or top of the pyramid) with government bailout capital will do absolutely nothing (covered in many of my previous essays) to get the 'consumption engine' of an 'income starved' economy running again. Effectively, there is no substitute for bold decisive action on the part of government policy makers in implementing a substantial fiscal stimulus program that immediately creates sufficient stable employment (not a token number of jobs) at a sustainable higher tier private sector wage rate. This must be immediately followed up with rebuilding the nation's capital stock to pre-income crisis levels through infrastructure investment in an industrial base that lends itself towards taking advantage of a nation's competitive advantage in multiple areas. In the case of the United States it has been determined that long term stimulus investments (substantial) that target the creation of a 'Green Industry' sector would have the potential of employing millions of Americans across all professions within two main program branches comprised of manufacturing and delivery. Subsidiary industries would also be created either directly through government and/or private sector capital infusions that would ultimately employ a cross section of every professional occupation group that has been placed on the unemployment rolls during this income crisis.
The global community has so little time left in which to act decisively. We are racing ever faster with each passing day down a cold dark abyss towards the terminus of economic collapse. We must act now, not later.
Posted on my blog 11/5/2008 at:
http://structuraleconissues.blogspot.com/
The jobless rate went up yesterday to 6.1% nationally with a loss of 84,000 jobs... Here in California that number is even higher on the whole. Los Angeles for example has an 8.1% unemployment rate and the state is at 7.1%. People are loosing their homes. I sympathize cause I've already lost mine and my wife and I are coming out of bankruptcy.
I watch all the news stations and saw you somewhere out in what appeared to be western Pennsylvania talking about the poor jobs report...What I didn't see was a follow-up in that same excerpt, that same couple of sentences, about how you are going to put America back to work. Please tell us. We want to believe!
As you well know this election is close. It might very well be won on 'sound bites' that those not so close to the news cycle will be following... You must be tired, you look tired...I know I would be if I were you but we've got less than 60 days to win this election. I believe in you and what your team will do to take this country back for the people and what you and your team will do to unite the electorate. Please find the strength within and the energy to get more aggressive on the economy. I grew up in the Pennsylvania Dutch country and lived in the suburbs outside Detroit Michigan as well, two key battleground areas. The people want to believe. You are the candidate of hope and change! Please hit the eonomy harder and lead us all back to greater prosperity.
Sincerely,
A concerned American and a strong believer in you
The latest McCain campaign strategy is to paint the Obama-Biden ticket as being "on the fringe". We must, each of us refocus this election on the economy and other issues at hand! I urge each of you to reach out and write to a friend in a battleground or red state letting them know the facts. Let's put Amercia back to work and restore our standing of prestige in the world order!
Read More »I strongly disagree with the going trend analysis that suggests what is different about this deflationary trend is that the job losses are jobs that will never return.
Elits that think it sophisticated to ship our resources and jobs overseas are in for a very rude awakening by means of their own device... monetarism.
The value of the dollar is measured by economic growth--productivity. That productivity, that value, is easily monetized.
Consolidated capital, trying to manage the retributive value, has very sopisticatedly rendered itself obsolete.
Hold on to those dollars, though. They are about to have more value than a consolidated capital could ever, or will ever, give and get.
Obama 2008!
Very best wishes.
http://www.informativepost.com/2008/05/17/Northern-California-City-Declares-Bankruptcy-725.htm
The Bush administration has the claim of achieving one if not the longest low unemployment rate streak in recent history. The unemployment rate is defined, in a colloquial sense, by the amount of people that as a percentage of the work force are actively looking for a job, while currently without one. Until recently the economists’ traditional view was that anything under 7% meant an economy in “full employment” basically with that number representing the natural turnaround of people quitting, entering the job market, or getting fired. A rate lower than 7% could mean an overheated job market, sparking salary inflation and, consequently, general inflation. The numbers over the last few years of 4%, 3% or less, or even the latest reported 5% (down from 5.2%), defy this conventional view.
Read More »
i knew a few people who were forced to sell their homes or lost their homes to foreclosure. this is a national disgrace. we're putting our families on the streets. who can stop the insanity?
http://money.cnn.com/2008/04/29/real_estate/foreclosures_still_rising/index.htm?cnn=yes
Are unknown bloggers really safer from cardic arrest?
The case for anonymity
"Bloggers have pointed out that job applicants might not want prospective employers to Google them and discover their political or religious beliefs, embarrassing photographs or their frank thoughts about their workplace. And employers are checking".
unemployment at 5.1%.
heckuva job, mcdummy!! mission accomplished indeed!
http://www.hillaryclinton.com/video/61.aspx
it was one of my favorites, because i did fall through the trap door. as a single woman who became unemployed, i was forced to sell my home and burn through the retirement fund i worked 30+ years for. millions of families have lost their homes, millions of us have lost jobs. and now for the good news!
http://www.msnbc.msn.com/id/23518599
63,000 jobs slashed in february! 63,000!!!!!! wtf?
hurry up, hillary, we need relief.
2. Am I wrong in blaming the Republicans for sending my job overseas and loosing me my career? I don't hear any arguments against that belief. You realize that I am simply considered retired now, as we unemployed are not reported after we run out of unemployment compensation. Even if we are forced to take a minimum wage job, it stops us from being reported as unemployed. I doubt if you could even get SSI, unless you were so disabled that you couldn't land a job doing anything. (I think we should take a closer look there and see if it can be fixed.)
I wonder what happened to the Traffic Controllers of the Regan Era. Anyone know of someone else who lost a good career due to politics?
I was 57 in 2001 and was forced to use all that I had put back for retirement, so that I could survive until I could start receiving Social Security at 62. By the time I was old enough to retire, I had gone from $60K a year to working at McDonalds for $5.15 an hour. Even when the economy finally bounced back, I could get no call-backs from recruiters, for I had been a Mainframe Programmer/Analyst and you are considered as knowing nothing, unless you have used that knowledge within the last three months.
Read More »The candidates spoke about disability issues last night? I'm reasonably certain that there was some back-and-forth about heathcare, but did they say anything new or interesting about it?
I would have watched the debate myself except that we don't get CNN. You know why? Because I am not working right now, and we've had to cut back.
"But, Susan," I hear you saying, "I thought you had a job."
Read More »1. health care
2. jobs/employment
3. Iraq
According to polls, these are the BIG THREE for voters this time...these are the ones which will get SOMEONE elected.
We'd need at least one (but more is fine) person for each candidate:
Dillon could do Edwards
I'll do Kucinich
Freedom could do Obama
Fenyo likes Biden
Richardson guys are out there --
and we need a Hillary person.
a Gravel fan would be great,
and a Dodd man
**Gore is a non-starter--the man is NOT gonna run! lol
Bayh is out of the race
I for one feel that I could learn a LOT, and would feel a lot more informed. PLus sorta fun.
More popular candidates will have more people--so you can split up the research--
When the time comes we could invite everyone to our presentation, at a preset time--so anyone interested could see what we have to say--and then that could move into debate, if folks wanted to weigh in.
What do you think?
"In much counsel there is wisdom"
6 1/4 Years of Misguided Bush Economics
Once again courtesy of our friends at ADA Link
These figures represent the percentage differences from Jan 01 to Dec. 06:
1. Overall Unemployment
Number: +14.2
Rate: +7.1
2. Black Unemployment
Number:+6.5%
Rate: +2.4%
3. Hispanic Unemployment
Number: 5.9%
Rate: -6.8%
4. Unemployed Women who Maintain Families
Number: +4.5%
Rate: -7.5%
5.Youth Unemployment (Ages 16-19)
Number: -2.87%
Rate: +10.1%
6.Avg. Length of Unemployment
Weeks ['01]:12.6 ['05]: 15.9 +26.2%
7.Long Term Unemployment
27 Weeks and Over: +61.2%
8.Percent of Total Unemployed: +43.4%
9.Permanent Job Losers: +35.2%
10.Loss of Manufacturing Jobs: -16.8%
11.Persons in Poverty: +12.4%
12.Food Stamp Recipients: +37%%
13.Health Insurance
Number NOT covered: +13.1%
More importantly, "unemployment" is actually an unemployment rate. That is, it's not simply the total number of people who are without jobs, but rather a monthly measure of people who have lost jobs within the previous six months. After six months, these people are no longer considered "unemployed" whether they have another job or not. Nor does it count the number of people who "quit". Here "quit" is defined by the employer who may say this simply to avoid the penalty of paying higher unemployment insurance.
Still, this unemployment rate can be deceptive because we might have a 5% unemployment rate every month all year and then a drop to 4% in the run-up to the elections (these numbers for example only) and most people would construe this to mean something good. But what it's actually saying is akin to saying, "My bank account has been dwindling 5% every month all year, but this month it went down only 4%. I must be doing great!"
The unemployment rate is meaningless unless we also examine the (raw) number of people who have been hired. To continue the analogy above, in addition to looking at the amount of money being withdrawn from my account, I also need to consider how much money is being deposited into it. Similarly, to understand the unemployment situation, we have to look at both the number of workers coming into the economy as well as those who were withdrawn from the economy (laid off).
For comparison purposes, the number of new hires per month during the Clinton Administration was often over 400,000. It was reckoned that with an unemployment rate under 5%, new hires had to be at least 330,000 to maintain employment levels. So Clinton/Gore actually brought more workers into the economy. Regular people actually experienced better lives. This Republican administration, on the other hand, has given us unemployment rates over 5% and new hires under 250,000-- a net loss of jobs.
The bottom line is that citing "unemployment" is meaningless without considering other economic factors and can be used to deceive, which is what the Republican claim does. We need to think past the headline.
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