Federal Reserve Chairman Ben Bernanke and President George Bush want to get cash to the people – quickly – especially those with low and moderate incomes, presumably by slashing the key interest rate. Like cheaper credit is going to filter down to moderate and low income families – let’s get real.
The rich are getting richer and the poor are gaining numbers as the reality of earning enough money to support a family pushes higher and higher, while the jobs that pay enough to do so shrink. The reason for this is loss of jobs – the good old jobs of yesteryear, manufacturing and steel and the many small businesses that made the widgets they needed – to China.
My sort of brother in law fancies himself an economist. I questioned him a couple years back about the alarming transfer of skilled labor jobs to China. He explained to me, ever so kindly and condescendingly, that the jobs that have been shipped to China are the ones we don’t need. They do the labor; we (meaning the USA) provide the brainy, high tech jobs and research. He chuckled heartily and raised his glass to the good life.
Meanwhile, the highly paid skilled labor jobs are disappearing and the county’s landscape is showing signs of cracking. Violent crime falls when people have work. Communities thrive and grow when their members have a purpose. And believe it or not, making widgets can be a perfectly wonderful purpose. Doing a day’s labor for a living wage is a concept that needs to be reintroduced.
But it cannot be unless jobs, the ones in China, come back here. And yes, corporate earnings would be lower. CEO salaries would be lower. There is always a trade off. But do you really believe, Mr. or Ms. Average Investor, that your moderate stock portfolio is worth the sacrifice of the American way of life.
I think not.