Despite optimism-mongering in the media, in certain quarters of Washington, and elsewhere, we’ve had indication after indication in the economic data that American workers have not benefited from whatever lousy progress has been made in nudging up GDP. But now we know from the horse’s mouth: they’re mired in a tough new reality that is getting worse.
Contributed by Chriss Street. With the average cost of attending college in America at $120,000, a family of four should expect their children’s college to cost more than a home. Yet, optimism about the value of education provided justification for students to borrow $42 billion from the US this year. And many of them will end up as student-loan debt slaves.
A sadly familiar theme in the US—the growing ranks of the working poor—was fleshed out today. But the report did something else: it added graphic details to the conundrum of US healthcare spending: while it ballooned to $2.7 trillion, 17.9% of GDP, or $8,680 per capita, households have lowered their share. So have businesses. What gives?
Americans under fifty are paying the price. We don’t know exactly why. Even the panel of experts that authored the massive report, “US Health in International Perspective: Shorter Lives, Poorer Health,” admits that it can’t entirely pinpoint the reasons. But we do know how Americans under fifty, particularly males, are paying the price: with their lives.
Now some new fodder for the gun-control debate that the horrid events in Connecticut suddenly stirred into a frenzy, though it had been snoozing through the daily drumbeat of murders in Oakland, CA, a few miles across the Bay from me, or in Richmond to the north, or really in any other city. The fodder is inconvenient, however. For both sides of the debate.
Shocked and appalled—that was the reaction to the shopping-season debacle in the US. It was triggered by MasterCard’s ugly report. But now there’s a new term to describe “consumer spending,” “consumer debt,” and ultimately “trade deficits” when they occur as a function of such uplifting concepts as “holiday season” and “Christmas” whose magic is boiled down to just one issue: how much did everyone spend?
Friday’s plunge in consumer sentiment was hastily ascribed to the Fiscal Cliff. Like Sandy, it’s recruited to explain everything that goes wrong. But over the last few days, one monkey wrench after another has been thrown into the hope machinery, including the collapse of small-business hiring plans to the record low set during the catastrophic post-Lehman days.
Especially of CEOs who parachute into the executive office. Wall Street’s knee-jerk reaction can be phenomenal. Citigroup’s massacre of 11,000 souls caused its stock to jump. But the same day, we learn that wages adjusted for inflation dropped 1.4% in the third quarter—a continuation of 12 years of declines that has hollowed out the middle class, pushed people into the lower classes, and devastated the poor.
The inexplicable American consumer, the strongest creature out there that no one has been able to subdue yet, has come to grips with a new reality, euphemistically called “New Normal,” though it isn’t normal by any means, but dismal. Feeling more upbeat, they nudged up the Consumer Confidence Index to a level not seen since February 2008—a level that caused people to tear their hair out at the time.
Anecdotal evidence has been coagulating into numbers, and these numbers are now beginning to weigh down corporate earnings calls. It appears the toughest creature out there, the one that no one has been able to subdue yet, the ever wily and inexplicable American consumer, is having second thoughts about prescription drugs. And is fighting back. A paradigm shift. Causing “unprecedented concerns” in the industry.