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The article is beating around the bush: The answer is LACK OF DEMAND. Since the ordinary person can't afford jack shit and already exceeded all levels of debt
by sprash 11y ago
The article is beating around the bush: The answer is LACK OF DEMAND.
Since the ordinary person can't afford jack shit and already exceeded all levels of debt he/she can take nobody buys anything besides bare necessities. This is what you get if productivity rises sky high over decades and at the same time wages stagnate.
- arethuza 11y agoThat reminds me of a statement that the CEO of the multinational I used to work for made in 2008, he said: "Management best practice is to 'cut fast and deep' at the start of a recession" "We're really surprised how quickly demand has dropped" I wasn't daft enough to point out to the CxO who passed this message along to us that if everyone is doing the first of these then surely the second shouldn't come as a surprise? [NB this wasn't a criticism of the CEO implementing a 'cut deep and cut fast' policy - he was exceptionally good at his job, just surprise that given he was so obviously extremely bright that he didn't make the obvious inference.]
- static_noise 11y agoMicro-economy and Macro-economy have two totally different goals. This is the reason why the state takes on more and more debt to cover the monetary failings (in the macro-sense) of the private industry.
- yummyfajitas 11y agoLACK OF DEMAND...wages stagnate. You seem to be wildly misunderstanding Keynesian economics - the entire purpose of stimulating demand is to create inflation and lower real wages. Further, all your premises are definitively false in the US. Debt levels are falling, and aggregate demand (i.e. NGDP) has been steadily rising. https://research.stlouisfed.org/fred2/series/GDP https://research.stlouisfed.org/fred2/series/GDP http://www.businessinsider.com/deutsche-bank-lavorgna-americas-debt-to-gdp-pre-crisis-2012-6 http://www.businessinsider.com/deutsche-bank-lavorgna-americ... https://research.stlouisfed.org/fred2/series/HDTGPDUSQ163N https://research.stlouisfed.org/fred2/series/HDTGPDUSQ163N https://research.stlouisfed.org/fred2/series/TOTDTEUSQ163N https://research.stlouisfed.org/fred2/series/TOTDTEUSQ163N Globally GDP also is rising: https://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&ctype=l&strail=false&bcs=d&nselm=h&met_y=ny_gdp_pcap_cd&scale_y=lin&ind_y=false&rdim=region&idim=country:GBR:RUS:FRA:CHN:IND:NGA:ZAF:DEU&ifdim=region&hl=en&dl=en&ind=false https://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&... This is what you get if productivity rises sky high over decades and at the same time wages stagnate. Employee compensation has been rising, it's just shifted from taxable wages to untaxed benefits. https://research.stlouisfed.org/fred2/series/ECIALLCIV https://research.stlouisfed.org/fred2/series/ECIALLCIV Why don't you do even a tiny bit of research before posting? Literally every word of your post is false.
- j3116294 11y agoWouldn't paying off debts and lack of demand go hand in hand?
- yummyfajitas 11y agoApparently not, as the graph of NGDP shows.
- deleted 11y ago[deleted]
- sprash 11y agoYou are talking about the US which indeed has done a little bit better in the past 3 years than the rest of the world. However US economy does not equal the world economy.
- yummyfajitas 11y agoI included a link with global GDP also. I just know the US stats better, so I included more of them.
- mathgenius 11y agoYeah, it just now occurs to me that the low oil prices could be (partly) explained by a hugely slowing world economy. We could be in the midst of a massive depression and because of all the BS loans we don't even know it. So what to do? Buy gold?
- deleted 11y ago[deleted]
- tmaly 11y agoI think too many companies have pulled forward demand through easy credit. Things have caught up, and all the demand at present was already sold to the past.