Tuesday, June 07, 2011

America Teeters on A Great Depression

It wasn't that long ago that our Ruler, Stephen Harper, worshiped all things American.   Canada was a lazy, backward, northern-European style welfare state in the very worst sense of the term.   We would never be, never deserved to be, as well off as our southern cousins.

I wonder if Steve ever revisits those comments and thinks to himself, "what an asshole I was!"   Today, as Steve delights in reminding us (while taking the full measure of totally undeserved credit for it) Canada, like every other northern-European welfare state, is staying afloat, our hull withstanding the battering of the hyper-capitalist shoals.   And what about Steve's "American Idol?"

My  neighbours just returned from their annual, motor home tour of the US southwest.   They've been going for years.   They know all the best RV parks and see many of the same folks there year after year.   This year, I'm told, things were different, very different.

It seems many of the RV parks have become considerably larger.  They've expanded to build long-term, mobile home/trailer areas for those who have lost their houses to foreclosures and their jobs.  

They also ran into something they hadn't seen before - a new form of split marriage in which, in order to maintain a two-income family, one of the wage-earner/parents has to take work out of town.   It's usually the husband who loses his job and finally locates a decent job out of town, often out of state.  But the couple then can't find work there for the other spouse and they can't afford to give up that second paycheque.    They have to separate and hope it's temporary.

The BBC reports it's big time gloom and doom for American investors especially after the 3 June report showing job creation had fallen to a crawl.

A crawl is probably a rather generous way of describing the 54,000 jobs that America managed to create.

It is generally thought that the country needs to create some 200,000 every month just to keep pace with the growing population, so it is worth casting a glance at the detail of these payroll and unemployment figures to get an idea of the mountain the US still has to climb.   ...it is not unreasonable to estimate there are 16 million people in the US who want to work but cannot.

 Average home prices slumped 5.1% in the first quarter of the year from the same period in 2010.

This comes from the latest report from the S&P Case-Shiller index, which has sunk down to 2006 levels.

The infamous double-dip recession that everyone worried about last year has now re-emerged in the announcement from David Blitzer, the chairman of the committee that puts this index together.

Justin Urquhart Stewart, director of Seven Management, believes there is a good deal more to come.

"The US can't go on defying reality for ever,  " he says.

"The American market has been held up by cash, borrowing, merger and acquisition and historically good corporate results.

"But that simply cannot last, and the working out of the debt has to take place.

"The trigger point will come with a big company, someone the size of, say, Alcoa, issuing a profits warning . " 

AlterNet's Joshua Holland lists   "9 Signs that [Americans] May Be Living Through Another Depression. "   It's a thoughtful piece and a must read.  The chilling part is that America's leadership are flatly rejecting the very measures they need to take to answer their country's fiscal nightmare.

I suppose the really good aspect of all this is that Stephen Harper was held at bay long enough that he never had an opportunity to launch Canada down this same path to ruin.


Jim said...

You mean that he hasn't yet had the chance... Harper doesn't like looking at evidence, just because it clearly didn't work for the USA does not mean Harper will not implement it here, based on his ass backwards ideology.

The Mound of Sound said...

Well Jim I'm a firm believer in a global political leadership vacuum. The world is beset with technocrats like Harper who tinker with small things that interest them but steadfastly refuse to acknowledge the great challenges looming before them. What Harper lacks in intellect he uses ideology as a substitute.

Steve said...

Not that Harper cares, but crime US style, well its getting out of control, how did that happen? Libs?

More notes on the collapse.