CBS’s 60 Minutes interviews a variety of Americans, from different walks of life, all struggling to make ends meet.
No one knew it then [2007] but these were the opening days of the Great Recession. Now, layoffs that started with corporations are cascading into mom and pop shops.
As corporations began laying off workers in 2007 and 2008, a negative feedback loop began and those who were laid off spent less on consumer goods. As people bought fewer goods, more businesses had to lay off workers. Eventually, many of the businesses have to close their doors, and even the owners join the unemployment rolls. The bankruptcy rate for small businesses have tripled since the recession began. This leads to even further pain, as businesses are no longer paying rent on commercial properties, leading to defaults and layoffs at real estate management companies. One could go on and on about how the feedback loop strengthens, and even accelerates over time.
Today, as more people lose their jobs, and millions start falling off of emergency unemployment benefits, the downward spiral will continue.
For many, there is no end in sight to the misery.
For others who still have jobs today, the pain is yet to come, because eventually millions more will be let go.
It’s simple math. And it can’t be stopped.
60 Minutes Reports:
Hat tip All American Gold
I wonder why CBS would broadcast this kind of content now – just prior to election day? Why not last week, last month or last year. This has been going on for more than two years now.
Just a sign of things to come.
U6 of 25% will be here very soon.
Until governments at all levels drastically reduce the size of government we will continue to head into a deeper depression. A good start would be to fire half the government workers and eliminate 80% of the federal departments. Most of what the federal government does is unconstitutional and should be ended. THEN maybe citizens will be able to keep enough of their money to buy things and improve their quality of life. This will restore the economy.
The only thing the govt can do to help the economy is to get rid of themselves and be out of the way. Â People in communities can figure things out for themselves better than this mess!!
People will give willingly to help others in need. Â Communities will figure a way to locally help people through churches, community programs, etc.
Jobs can be created locally, not nationally. Â The infrastructure of the country needs rebuilt. Â People take too many prescriptions. Â When you stop going to the doctor, you will be more well for the most part. Â Eliminate all this waste, and entitlement programs. Â Let people farm the “Government Lands” and let them homestead again. Â There’s plenty for all, if the govt stops regulating everything…
I agree, jobs have to start at the local level. However, we have to stop letting big business eat main street alive. Making it cheap and easy for them to send labor overseas while making it expensive and restricted for a business in the states to grow is ridiculous and plain wrong. Instead of bailing out big business, tell big business it only gets OUR help if it stays here and employees OUR people.
Local jobs aren’t going to appear by magic with globalism alive and well, most people aren’t really competing with other US citizens, your competing with Chinese/Indians etc and we can’t compete with the low wages of production over there. Many local businesses can’t create a small business, b/c banks aren’t loaning out much money, and most of the time they have to compete with Walmart—which they cannot do–because of scale, and the Superstores more of less wipe out many different businesses that people used to create at cornerstores in the US.Â
The playing field isn’t level, its tilted, and the US worker bee is just beginning to feel the pain as ‘globalism’ seeks out the lowest priced labor and the wealth pools with fewer and fewer people.
In regards to Gone with the wind, I agree with the sentiment, but in reality 50% of people in the US functionally pay zero Federal income tax. Medicare and Social Security eat up a ton, and of course warmongering helps to eat up the rest. Those three things alone account for the majority of the US budget, plus paying interest to the Feudal lords, er International Bankers for the right to borrow their fiat paper, or whatever it is now adays–their ability to type money into existence.
Smaller government is needed for budgetary reasons, and I would argue for liberty as well–but in terms of job creation, smaller government wouldn’t lead to much job growth, and in the short run, would lead to much more unemployment. Soon the state budgets and Unfunded Pension problems are going to implode most states in the Union.Â
I don’t think most people truly understand that many jobs can’t be created b/c of global ‘free markets’ keep the costs amazingly low in other nations, so US workers can’t compete, can’t live in the US off of 1$/hour….
Americans have been fed the “globalism, free trade” crap, for over 30 years now, and look where it has landed us.
That’s why we are throwing the whole bunch out of DC, today!
Go Vote!
unemployment is a terribly expensive problem for those of us who are intelligent enough to have good jobs. we need to increase outsourcing of jobs to india and china to make goods cheaper in american so these unemployed slobs can affford them. also we need to increase the number of h1b visas so more skilled asian workers can come to america and conpete forhighly skilled  jobs thus lowering salaries across the board. this will make goods cheaper for those of us who continue to buy goods.
i’m sure that ben bernanke and the economic advisors in the white houe such as rubin and feinberg are creating plans to help all those of us who remain employed weather this storm.
god bless our government economic advisors and all those in the wall street banking community who are hard at work trying to help the middle class.
Mushroom,
You really like to antagonize people don’t you? The reason the US is in the predicament it is in because of of ‘Free Trade’ North American Free Trade Agreement (NAFTA) and other Free Trade agreements that have basically made the American corporations rich while the American citizen although gets cheep goods, they are usually of inferior quality and they are made in countries where companies can profit from low wage workers.
The country also has problems with entitlement programs sucking up more of our debt. The govt as Mitch mentioned only gets about 50 percent of the population to pay taxes. Many do do not pay taxes. Also, you have the wonderful Federal Reserve which you mention Mr. Bernanke who has done nothing but give low/zero interest and what do Banks and American companies do? They do not create and/or expand businesses. The banks do not lend for people with innovative ideas to start businesses.
Our ‘wonderful’ government does not even care for small businesses. It has been told by the lobbying in Capitol Hill and the bribes (contributions) that they have received for passing laws to help companies not pay taxes.
The US government in total has around possibly $120-$200 trillion in debt.
You most likely like being the Devil’s advocate because the ongoing economic crisis makes you think that the people in the US government are actually helping the economy and its citizens to get work, and somehow get out of this sluggish economy.
Yeah right. When the country either defaults or goes into Hyper-Inflation mode (ex. Think Weimar Republic and/or Zimbabwe)
You know that America will take many countries with them with Americans suffereing for years to come.
Vote for a Patriot and if that person sells out, vote them out. It is the only way to take back the country and our freedom.
They are just trying to CYA with this article. This statement is completely false: “No one knew it then [2007] but these were the opening days of the Great Recession.”
Thanks to the Austrian Economist such as Gary North and the efforts of those on thehousingbubbleblog I knew full well this was coming, as did many others, well before 2007.
We tried to warn people, but, “People are smart” and wouldn’t listen. Fools they called us, because we tried to warn them.
The funny thing is, people are still listening to the beaurats, the error prone Keynesians and the Monetarists rather than the Austrians who foresaw this.
@GoneWithTheWind – Good start. But fire them all. Start over. No former/current government employee (they don’t work, honestly, come work with me to see what work really is or any number of others on these forums) at any level (Federal, State, Local, etc) can get a job there. Cut the pay by 75% so they make HALF of what the same person in the general labor force does and give them some benefits to make up for it.
As I heard some where the other day, change the minimum wage (or eliminate it, if people don’t think a job is worth the offered wage they won’t take it) and bring back low paying entry level jobs. Americans need to get used to the idea that $75/hr jobs are few and far between and you do NOT deserve them. Everything is earned. I think society is so far gone that until there is a reality check (crash/collapse) nothing will change.
Most males would rather watch men play child games and follow that rather then get involved where the founding fathers wanted them to be. Keeping the country great. We’ve given the keys away and now we’re bitching the kids are beating on the car. Bit late honestly.
@ Mitch – Even better start. But we cannot change anything until everyone pays into the system their fair share. Sadly I think we went over to the dark side this year (it was like 49% don’t contribute towards the Federal government last year) so likely over 50% now… Gah. Too many lazy people. Most think they work hard, some do at their job but not as a citizen. Few know much about the US, it’s government, how it works, etc. That’s a job/responsibility too. To protect the country. To protect their childerns future. To protect their neighbors.
Before we can change much we need the schools to educate the kids about the fact we’re NOT a Democracy but a Republic which should be run by majority rule so a minor majority cannot dictate the terms over a major minority. 2/3rds or it’s a no go.
And STOP making 6000 pages of laws every quarter. Every law abiding American can barely stop from breaking some stupid law now-a-days with or without knowing it. Less is often better and in this case it is. Eliminate most laws not written when the country was founded and start over.
Gah. Republican or Democrat. Nothing will change. Two faces of the same beast and so few even understand that it’s scary. It’s a country for the corporation by the corporation (remember, they’re people too!)
Wake up people – Democrats and republicans can’t help us. That should be apparent by now.
Read “Common Sense 3.1†at ( http://www.revolution2.osixs.org )
Stop chasing your butttttts – before it’s too late.
The author is right. Things are going to get much worse. This is Just the calm before the storm. If you think reducing the size of government or voting for republicans is going to change a damn thing, then you deserve the government you get. We don’t have to live like this. Pick up your asses and join the Revolution, or stop complaining. Government, the banks and big business don’t care. They will let this country rot.
Noticing more and more small businesses closing completely here.
Gun store that has been around for 20 years, equipment rental place that was into the second generation, that type of thing. The BigBox stores seem to be doing fine, but even my BIL that works for Walmart is job scared.
Gang, it works like this: Big Money buys politicians, and pays them to enact laws that benefit Big Money, and repeal laws that don’t. Because politicians can’t get elected without the money that Big Money provides, the elected politicians are beholden to Big Money. As long as we keep privately funding our public elections, you will be screwed unless you are wealthy enough to buy your own politicians. All other reforms are doomed to failure until we get back to “one man, one vote” and away from “money talks, everyone else shut up!”
I don’t know what all the complaining is about but a recent CNN Money Poll shows that most economists believe that unemployment will start dropping as early as 2012! All the way back down to 9%. And that’s the high consensus! Low consensus has it back down to 6.8%!
I believe economists because they told me:
1. We weren’t heading into a recession.
2. Housing prices never decline nationally.
3. Stock market always provides maximum gain over time.
4. 401(k) is the safest place to put your money.
5. Gold/silver is for doom and gloomers.
6. We aren’t in a recession.
7. The recession ended.
8. The way to solve financial deficits is to print more money.
See? The wisdom is all in their words.
Comments…..To our American Cousins – watching the clip of 60 minutes is very sad – watching honest folks basically live day to day – not knowing what the future brings sad – As your neighbour up north – the winds of change are coming and most are blind to see whats in store. We have not experienced the housing fallout ÿet”- but its coming – and it will slam us hard.
@Rob – I heard on the radio this morning driving to a job that houses in BC are 30-50% over valued. Its how long the ponzi scheme can keep going I guess.
Comments…..
I agree with the article. But, did the recession begin in 2007? No, it began during midterm into the clinton admin. he and his cronies had fostered a false economy. Whether it was because of Bin Laden or Monica. Today, it dosen’t really matter, we are living on the very brink of destruction. This government behaves exactly like the pinheads who bought homes that they knew they could not afford.
During my working years, my family worked for a large textile compay (Dupont), we made very good wages with excellant benefits. But during the 30 yrs. I personally worked for this company, my Dad, always reminded his kid’s to have a rainy day nest egg. He was the product of the Great Depression and the Dust Bowl of the midwest. His family lost everything.
When times did improve, he and his siblings came away with a totally differnt mindset of life, money and family (his words, not mine).Â
Again, during my working years, as a result of the ups and downs of the economy during the 60’s,70’s and 80’s, I was laid off over 7 times. Each time you would think would be harder and harder, well yes to some degree, but it definately awakened me to the dangers of “living beyond your means.”
I saw families lose it all, never to regain the loss. I saw drugs and drink become their crutch. I have seen unscruplous bankers, real estate salesmen and “brokers” take advantage of young families just starting out lose it all.
I would suggest that the “revolution” that everyone is either looking for or hoping for will not be a godsend. It will only produce more and more grief.
Although I do beleive that NAFTA and the free trade agreements have enhanced the fall of this economy as much as the greed.
I was told just recently, that the manufacturing base in this country will never come back. I was told it would cost to much to renoveate and retool. I do not agree.
If the fed’s will lower the corporate tax rate, increase the export tax, and then tax the “hell” out of anyone that moves American businesses out of this country and then in turn exports to this country.
Will it be tough, you bet, will it be painful, absolutely, it may even take several years to turn this around, but it will return the country back to the most heaviest Mfg. country, just like once before.
@DDR – No, taxing goods coming into this country will just increase our cost of living without raising our wages. And if it gets too bad people will just stop sending their stuff to us. Europe and Asia are much larger markets anyways. We’ve made ourselves irrelevant and now have to suffer from our poor choices in leadership. Consumer spending (not a product) was 70% of GDP 4 years ago, this quarter it was 90%. That is not sustainable and the house of cards will come down sooner rather then later I fear.
Lowering corporate taxes will help mom and pop stores though but it would take years for them to build up and help unemployment.Â
You have to ask yourself this question, “what do we have that we can make for less then other countries with cheaper labor forces?”
Our quality is questionable now-a-days. I drive a Ford pickup and compared to any imported truck I’ve been in/driven they’re crap. Its cheap crap though and since it was given to me by someone I don’t complain 😉
We used to be a credit nation, now we’re a debt nation. That hurt us a lot.
No simple answer of course, as it’s a complex issue.
Ever wonder what houses would cost if it were not possible to borrow money to buy one? (My answer: the cost of today’s down payment.) How about cars? What would they cost if there were no car loans? Cost of a college education? I think we owe our poor productivity (the economic kind of productivity) to the money lenders, who have made us uncompetitive by making our cost of living so high through printing and lending.
Just my 2 cents…
@sjdude – Or, is it our collective fault for taking the money? Just because you are offered drugs does not mean you have to buy or use them. Personal responsibility has truly flown the coop in this country, I feel.