What is Wrong with the American Economy?

The American economy fails the Test of Advertising, as this article can attest. Bovine Spongiform Encephalopathy has been linked to very few Cases of Variant Creutzfeld-Jakob Disease (I would suspect less than 10) in the entire World, while multi-billion Beef meals are eaten every year. Common Food Poisonings have killed many Thousands more than the human disease listed in the history of the World, and have come from a multiple set of Foods and Conditions. Adequate measures have been taken to forestall the Bovine disease, and there is little indication that variant Creutzfeld-Jakob Disease spreads through simple human contact. The Asian hysteria about SARS may be well justified, but fears of Mad-Cow Disease are way overblown, and American Advertising falls very short in dealing with it.

Economists ask whether the Stimulus payments will be able to sustain the Consumption markets. The Answer to that is easy–No! The Reset of variable rates in the Mortgage markets was the Death rattle for any boost to Consumer Spending, all because the Finance markets did not immediately Write-Down their Losses, which were carried forward to adversely raise Mortgage rates and Business Carry-Debt. I warned when this Crisis first started that only quick declaration of Losses would prevent long-term hazards to the Economy; Banking units dismissing this Option as highlighting their Management inefficiency–proving they were actually incompetent. We are now in the Situation I feared, with four months of Job losses, and devoid of solid Consumer Demand for Product. I am not a great advocate of Transparency, thinking it accomplishes little in forestalling Fraud as Criminals falsify Reports; yet, I am also a great opponent of Stupidity, and why try to hide Losses which will eventually have to be Reported anyway?

Here is part of the reason why the American economy will suffer in months ahead. Delta is cutting its labor pool greater than initially planned, because Workers smell that it is Time to Bail. American Axle is doing much the Same, and the problem consists of who composes the Bailouts. These are the high-Salaried employees who can demand and get the lucrative Retirement packages, and know that Now is the Time to get the good Deals. These Packages may be the Doom of Consumer Demand, which will be mainly channeled to Investment with the previously high-Paid labor downscaling their Consumption; the total bringing a smaller Labor enrollment who are paid substantially less in Consumption-directed Income. The Months ahead may prove to be very difficult. lgl