That's the root of this depression -- the drive for ever cheaper and cheaper labor for more than two decades, in an economy where 70% of economic activity is consumer spending (mostly U.S. consumer spending).
The disconnect is nothing short of insanity.
I disagree. I think the problem is the grasshoppers have outnumbered the ants.
Our government depends on a certain number of voluntary slaves to keep things moving. The government is losing control. The feeders are demanding more, and the slaves are already pushed to the limit. That's the big picture. For example: The slaves can't afford to buy houses for the non working democrat base (and feed the entire world at the same time). The government has gone too far. The slaves are getting restless.
That’s the root of this depression — the drive for ever cheaper and cheaper labor for more than two decades, in an economy where 70% of economic activity is consumer spending (mostly U.S. consumer spending).
The disconnect is nothing short of insanity.
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“Insanity” is the perfect word. You are exactly right. How is the American Consumer going to keep on consuming when he doesn’t have a good-paying job?
Greenspan and others had (and still have) the idea that wage inflation was the number one economic enemy to be fought. Fortunately, the unfolding deflationary spiral is likely to take asset prices and rents (but not food nor gasoline prices) down faster and harder than wages will fall, so things should ultimately normalize a bit at a lower level.