Sonic's Place

views on the world and the war

Friday, November 28, 2008

The Microeconomics and Macroeconomics of Job Loss

It is true that some homeowners have purchased homes that were out of their range. Some mortgage companies in the subprime market have taken advantage of deregulations within the industry. That is not the complete story and only accounts for less than 30% of what is currently in foreclosure or default.

Jobs are necessary for people to earn money to pay for their homes. When one looses their job it affects more than just there lifestyle, it affects everyone to some degree or another.
Do not be fooled in the media hyped propaganda, that it was the mortgage industry that blew it all up.

For the last 3-4 years, there has been a steady stream of job loss in this country. Some of these losses are due to downsizing of companies and sending jobs overseas for cheaper labor. It is not just the auto industry that has sent jobs overseas, many others have followed suit.

Let me illustrate what happens when a person looses their job. The first thing is that they go to unemployment to file a claim. The next they start the tedious job of looking for work. The average time it has taken as per reports from the media is anywhere between 4.5 to 6 months or more to get another job.

Here is a person who is looking for work and the majority of employers evaluate, how long that person has been out of work and are their skills up to date. The theme of most employers if that person has been out of work too long, then they most likely will pass them up. If they are hired, usually it is for less money than there original salary that they made from there past job.

In the interim of time, unless that person has 6 months worth of money saved then they will be late on payments and may not be able to pay there mortgage in part or in full. They may be forced into bankruptcy on their credit cards. This obviously affects their credit and affects their employment, since credit in a majority of cases is also viewed as a qualification.

Now if you have one person, no longer able to make payments for basic expenses, it destroys their credit not to mention their self-esteem. Realize that this does effect their consumption on food, utilities and travel.

At these times with high cost of gas and basic utilities, it pushes the individual reduce the use of these most basic of needs. Though unemployment can assist some, it generally is insufficient to pay for all the basic bills, especially rent or mortgages.

Think about a homeowner who has to pay the homeowner insurance, mortgage, and car payments, car insurance not to mention health insurance. Investment in a 401K or Ira ceases and possible borrowing from these retirement account if one is lucky to have one, will drive them further into indebtedness.

The job loss influences the microeconomics of businesses that surround the level of earnings for this individual. Let us add to that those defaults on credit accounts of which this individual will be harassed by collectors. Now, let us add millions of Americans out of work. It is not just the blue-collar worker it also includes the white-collar worker. The combined incomes support a myriad of businesses from real estate to the mom and pop store down the block.

I recall my father who had bought a grocery store in the Bronx. About five months after the purchase 5 buildings in the neighborhood where condemned, this forced over 1000 people out of the area. The result was a $ 500.00 reduction in sales per day!

If you do the math, that is a decrease of $ 180,000.00 in business. My father then had to buy less inventory from the wholesalers, which affects their profit margins. The decrease in profit margins from the wholesaler had to adjust there wholesale purchases. Realize that this simple shift affected a chain of other businesses surrounding one action from the city.

This of course led to my father letting go of help in the store. He could no longer afford an employee; it took 3 years of working on his own with family helping out as they could, to finally hiring someone for relief.

Now when we turn into the bigger picture, that view of macroeconomics and expand to millions of people, this is quit an effect. If we take a view that the average person makes about $ 20,000 per year and we multiply that by about 14 million jobless, we arrive at $ 280 billion dollars out of circulation.

This affects all Wall Street and Main Street. Savings, Investment, Utilities, Mortgage, Apartment Owners, Retail facilities are all affected. Compound this with falling off the tax roles of the cities, states and federal government and you have a crisis.

Home values will continue to decline until this hole is filled. The notion that home values will return once the inventory of already defaulted properties decreases is faulty at best. The reason is that the inventories of defaults will not be reduced until jobs are restored once again. I have watched my home value drop from 425K to 217K and it continues to decline in value.

The only way to stop the downturn is to freeze all default properties for the next at least 6 months until people can get back on their feet. There is just no other way. If you want even more of a crisis, keep the foreclosures going and the problem becomes the homeless and major increases in crime.

In my own community, I have seen many businesses close. Furniture businesses, small video rentals, and even caf?'s have closed their doors. This is why the banking and financial institutions are in trouble. Giving them more money to loan homeowners is not a solution. Banks are now raising their standards to qualify for a mortgage. The current homeowner may not be able to meet the new requirements, which does nothing for a refinance.

Credit card companies are raising their interest rates and are lowering the credit lines for most card holders if not canceling their card altogether. The credit freeze continues while the card companies will enjoy the bail out money.

Investing in new technologies, energy and other alternatives will bring about more job stability. Working on Infrastructures from roads to fixing schools will bring about more stimulation to the economy at large then just bailing out failing companies.

I find it odd that the same companies that are being bailed out are still paying high compensation to their executives. These CEO's should at least make the gesture of cutting 20% of their executive pay to help keep personnel.

This problem was caused by the need of greed. The larger companies are always accountable to their stockholders. There ability to ship jobs overseas for cheap labor increases their bottom line. CEO's enjoy a blessed life with golden parachutes. The average American worker usually has only what they earn and that is it.

I have no problem with competitiveness. Corporations should do what they can to make their bottom line profitable. That is a responsible behavior. Yet, that is not what we are seeing. What we see is many jobs going overseas or being eliminated altogether, without retraining or assisting individuals for new gainful employment.

Greed has replaced social responsibility. The deficit has risen and government has abandoned its responsibility to the American public. The elite in government will not recognize any problem until it hits home.

Americans are much smarter than this past administration credits them. These current elections have given the new administration a mandate, to stop the bleeding and bring us back home to the America we know and love.

We are still that great experiment that was created many years ago. We are the creative and the most blessed country in resources and innovation. Let us put that to use and bring back the prosperity that we all truly deserve.

John Tebar Certified Life Coach, author and entrepreneur sign up for Ezine at http://holisticlifeplanningandresearch.com

Labels: Credit, Father, Industry, Insurance, Ira, Job, Main Street, Money, Mortgage, Person, Store, Wall Street, Work

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Friday, August 18, 2006

More on the London execution

The Times has a piece that begins to challange some of the recieved wisdom on the London execution.

http://www.timesonline.co.uk/article/0,,22989-1707480,00.html

Another family member said that he had recently been attacked and robbed in that area by a gang of young white men and thought the plain-clothes officers were muggers.

By far the most controversial claim comes from a number of witnesses who have cast doubt on police statements that they shouted a warning or identified themselves to the suspect before opening fire.

Lee Ruston, 32, who was on the platform, said that he did not hear any of the three shout “police” or anything like it. Mr Ruston, a construction company director, said that he saw two of the officers put on their blue baseball caps marked “police” but that the frightened electrician could not have seen that happen because he had his back to the officers and was running with his head down.

Mr Ruston remembers one of the Scotland Yard team screaming into a radio as they were running. Mr Ruston thought the man that they were chasing “looked Asian” as he tumbled on to a waiting Northern Line train.

Less than a minute later Mr Menezes was pinned to the floor of the carriage by two men while a third officer fired five shots into the base of his skull.

Again, Mr Ruston says that no verbal warning was given.

I'm certain there is a lot more to this story that we have been told.

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Monday, November 07, 2005

On Paris

Another exiled euro-lefty now resident in New Zealand, Joe, had written an excellent piece on the Paris Riots, well worth a read.

I was one of the coordinators of the Irish mobilization to the Second European Social Forum which was held in Paris two years ago, to the day. We had over a hundred people come from Ireland, and it was my job to head over early and co-ordinate accommodation with the ESF organizers there, as well as get the lie of the land and find out where everything was happening...

Imagine the shock when most people coming to the ESF discovered that a lot of the sessions were happening thirty or forty kilometers out from what most of us consider Paris, that beautiful walled medieval city of the Commune, May 68 and the Revolution. I spent the first day going from Bobigny (end of the line) to St Denis, and the hidden Paris of the ghetto-suburbs blew me away. Looking back on it now, the French ESF organizers probably opened Europe's eyes to the hidden reality of 21st century Paris. At the time we thought it was stupid to spend half the day traveling, but now I think it might have been a stroke of genius...

Mile after mile of desolate estate-high rise ghettos reaching out to the horizon. The train stations were all covered with New York style hip hop graffiti, and when I got off at the second last stop (St Denis-Porte de Paris) I got a real shock.

It was Bastille Day, when France celebrates its revolution, and in the middle of this concrete urban bunker that doubled as the town's main square, a bunch of old (white) army veterans were holding up French Tricolor banners gilded in gold with the names of their legions and the battles they had fought inscribed on it. This did not look to me like a progressive bunch of Communards or Sans Culottes. Maybe some of these guys had seen action in Algeria with Le PEn's torturing paratroopers.

Around them were clusters of African and Arab kids, shouting out the names of towns and cities these old men had probably killed people in. Bwtween the two groups were a cohort of fully tooled up CRS riot police, with body armor, Alsatian dogs, tear gas weapons that looked like sawn off shotguns, and huge paddy wagons with armor plating on them. To me it looked like some version of the Orange Order insisting on their right to march provocatively in Derry, aided by their RUC racist police cousins... I remembered the Bob Marley song at the beginning of the cinema verite intro to the film La Haine, with his words "they were dressed in uniforms of brutality" echoing over a montage of riots in Paris.

We went on to meet a lot of the French and European left that week, with these suburbs as an ever hissing background. We crossed a bridge in one suburb where the CRS had massacred hundreds of Arabs in Paris when they attacked a solidarity march during the height of the Algerian War. We stayed with most of the North of Ireland crew in a gym in the old Jewish quarter of Villejuif, which was cleared of most of its Jewish citizens by the Nazis and the Vichy, and was now a bustling Arab section. It had been a stronghold of the French Communist Party, the PCF, and in a nice touch of Gallic solidarity, the old Communist mayor came round one morning and cooked a hundred of us an unbelievable French breakfast! (I'd date the revival of the French left from there!)

SOlidarity with their North of Irish comrades, no problem. But what struck me most about the French left was their lack of contacts with the Arab and African ghettos of Paris and beyond. A group of us North of Irelanders went out to an Arab cafe one night, and I'm nearly sure we were the first caucasian group EVER inside! IN our broken French we talked about the ESF- most of them had not heard about it. But they were amazed to learn that we were against the war, supported the resistance in Iraq and Palestine, hated the Front National and defended the right for Muslims to wear the hijab. We left that Arab cafe late that morning with a lot of new friends! Many of them will have been out fighting this week.

I am disappointed to see that the resurgent French radical left, that has been kicking neo-liberal ass with the defeat of the EU Constitution and the nearly monthly mass strikes, is nowhere to be seen defending the kids of the banluies. If there was a similar uprising here in South Auckland, I have every confidence in the radical workers movement in Aotearoa that we would defend the kids here. The problems are the same in the worlds big cities- poor working class youth, often immigrant and multicultural, lies fuming, festering, and forgotten in huge sprawling ghettos miles away from Sky or Eiffel Towers...

The French radical left needs to engage with Arab and black French youth. Supporting the government's crackdown on the hijab was disgusting, and revolutionaries should really know better.

There is now an uprising, an intifada, in urban France. le Pen's fascists have been along to some of the so called "peace marches", wearing tricolor sashes and talking about the need to clear the ghettos of "scum". In the weeks to come, the French radical left has a major part to play. Will they end up like the old CP in May 68- condemning the students whose bravery fighting the CRS led three weeks later to Western Europe's closest shot to a socialist revolution, with over 1o million on strike? Much better if they'd play the role of the students...
Ovulation Test Pregnancy Test

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Friday, November 04, 2005

Picture of the day

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Monday, October 31, 2005

RIP Harrys Place

Despite Harry dropping his pledge to ~~give us all a break~~ cease blogging, the decline and fall of Little Green Soccerballs continues.

Aaronovitch watch nails why (referring to Nick Cohen)

It seems to me that while Nick may be up for a fight, the people he’s accusing of spilling his pint aren’t. Rather than engage in a great intellectual struggle with Nick, Dave and the decents, mainstream left opinion (inasmuch as the Guardian op ed pages represent it) seems to be routing around it. On the one hand you have Seumas Milne’s usual repertory company, sticking it to the septics and sticking up for the Allah-besotted. On the other you have all these genteel Tories, preaching realism from a comfortable distance above the fray. The parameters here seem to relate to the majority consensus in Britain over the London bombings, namely that the Iraq conflict made them more likely to happen. Within that there's plenty of room for a chat about the who and the what and the why. Outside it...well, where's your audience?

Something similar seems to be going on over in Blogistan. The pro-war left went into a spasm of self-righteousness after July 7, de-linking here and there; condemning this, insisting on that, stagily revealing collaborators, sternly sorting sheep from goats. The result seems to be that they’ve now shrunk into a circular network, constantly cross linking, boosting their favourite columnists, uninterested in events that don’t immediately fit in with their preconceptions and increasingly adrift from the general bloggy conversation. The United Against Terror project seems to have gone splat and Harry’s Place is reduced to trolling for attention. Even their old antagonists at the movement antiwar sites don’t seem to bother too much with what they have to say. The only outward channel they have leads them directly to the hard right in the USA. And so a tendency hardens into a sect, which in turn boils down into something that’s starting to resemble a cult.

When this happens, you have to shout louder for attention. You have to say that you’re involved, for instance, in the greatest intellectual struggle of your time. You have to promise apocalyptic smash ups. Those who disagree with you have been driven mad by the course of history. It’s all a bit sad.

Labels: Iraq

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Tuesday, October 25, 2005

A real fighter for freedom passes away

Rosa Parks is dead

Parks was working as a seamstress for the Montgomery Fair department store, and as she waited for the Cleveland Avenue bus to take her home, she let a full bus go by. The Jim Crow laws reserved the first four rows of a city bus for whites and the last 10 for blacks. The seats in the middle could be used by blacks if no whites sought them. But if a white person wanted a seat, the whole row was emptied.

Also, bus drivers in Montgomery made blacks, who were nearly 70 percent of the riders, enter the front door, pay their fare, disembark and re-enter by the back door. Many blacks were left standing, fareless, when the bus driver pulled away before they could reboard.

James F. Blake, the driver of the bus Parks boarded in 1955, had put her off a bus in 1943 when she refused to enter through the back door because the back was jammed. After that, she refused to board any bus he drove, but when the bus pulled up to the Court Square stop, Parks forgot to check who the driver was. She got on and took a seat in the middle section, next to a black man at the window and across the aisle from two women. At the next stop, some white people got on, filling up the seats reserved for them, and one white man was left standing.

"Let me have those front seats," the driver said, indicating the front seats of the middle section. No one moved. He repeated himself: "Y'all better make it light on yourselves and let me have those seats."

The black rider by the window rose, and Parks moved to let him pass by. The two women across the aisle also stood up. Parks slid over to the window. "I could not see how standing up was going to 'make it light' for me," she wrote in her autobiography, "My Story" (1992). "The more we gave in and complied, the worse they treated us.

"I thought back to the time when I used to sit up all night and didn't sleep, and my grandfather would have his gun right by the fireplace, or if he had his one-horse wagon going anywhere, he always had his gun in the back of the wagon," she wrote. "People always say that I didn't give up my seat because I was tired, but that isn't true. I was not tired physically, or no more tired than I usually was at the end of a working day. I was not old, although some people have an image of me as being old then. I was forty-two. No, the only tired I was, was tired of giving in."

The bus driver said he would have her arrested, and she replied, "You may do that." He called the police and waited. Some riders got off, but not everyone, and Parks recalled that it was very quiet. When the police arrived, she asked one, "Why do you all push us around?" She said he replied, "I don't know, but the law is the law, and you're under arrest."

She was bailed out that night, and her boss at the NAACP asked if she would be the test case for a lawsuit. She discussed it with her husband and mother and then agreed. Meanwhile, the leaders of the Women's Political Council mimeographed 35,000 handbills calling for a bus boycott. Black ministers got behind the effort. All 18 black-owned cab companies agreed to stop at all bus stops and charge 10 cents per ride, while others carpooled or walked.

..............

As Parks went into her trial, a young girl called out, "Oh, she's so sweet. They've messed with the wrong one now." The crowd took up the latter half of the cry.

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Thursday, October 13, 2005

The Zawahiri Letter

Left-I makes two excellent points (as ever)

On the day when a new poll reveals that 59 percent of Americans think U.S. troops should withdraw from Iraq as soon as possible, the U.S. government suddenly decides to release the text of an alleged letter, allegedly captured last summer, which purports to be advice given by Ayman al-Zawahiri to Abu Musab al-Zarqawi. And conveniently, the advice is all about how Zarqawi should attempt to establish Islamic authority over as much of Iraq as possible after the Americans are expelled, thereby providing a fresh justification for why the U.S. shouldn't withdraw.

Is this letter genuine? There isn't any way for the average person to know. It could have been written by Zawahiri, it could have been written by the CIA, or it could have been written by any person pretending to be Zawahiri and trying to substitute their own strategy for whatever strategy Zawahiri is (or isn't) advocating. Take a look at the recent "threat to New York City subways" hoax and you'll see how easy the American authorities can be fooled, assuming that it isn't they who are doing the fooling. I say all this despite the fact that the advice itself seems perfectly sensible (and something any Marxist could completely identify with) -- maintaining and increasing "popular support from the Muslim masses." Nevertheless, the key thing about this letter isn't whether or not it's genuine, it's to understand why the U.S. government chose to release it at this time.

Here's the strangest part of the story: "The American intelligence official would not say...whether it was believed to have been received by Mr. Zarqawi." So let's try to understand this. Zawahiri tries to send a very important communication about strategy to Zarqawi. The U.S. government intercepts it. Zarqawi may not have received it, i.e., he may not have received this advice from Zawahiri. And, in the face of that, the U.S. government decides to post the letter on the Internet, thereby assuring that Zarqawi now does have the benefit of Zawahiri's advice

And

" Remember when the U.S. government wouldn't allow tapes from bin Laden or Zawahiri to be broadcast on TV, using the excuse that there might be "hidden messages" in the broadcast that they couldn't allow to be transmitted? Now they release a 6,000-word letter from Zawahiri which could contain dozens of hidden messages for all they know. Curious, eh?

Indeed.

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