Our economy is tooled to produce luxury goods. Hummers and Escalades with multiple DVD players. Even the standard equipment on marginally desirable vehicles drives the price beyond what the average fiscally responsible wage earner can afford. $2000 plasma TVs. Home theater systems. Half-million dollar homes as commonplace.
It's going to be a hardship for producers to "retool" for more affordable goods for credit strapped consumers. Dodge is dropping the Viper. It reminds me of when Detroit was still cranking out gas guzzling 'land barges' when Japan was floating over cars like the Datsun B210 and the Honda Civic. Very shortsighted- again.
The price of gas is a large factor in pulling the economy down the charts into recession. You feel it at the pump and in everything you buy. You feel it in your home heating costs. Your paycheck doesn't go as far anymore.
The problem is, if the price of gas contributes heavily to the recession, then a decrease in the price is needed to offset the negative effects. Unfortunately the chances of fuel prices dropping by half or more to pre war prices are slim to none. Same for price of goods where fuel is a direct production cost or a little more indirect cost like shipping.
Current Events » in reply to Totally Spent - how this recession will be different.
Good article - thanks.
The whole thread (17 posts)
- Totally Spent - how this recession will be different.
- "The only way to keep the economy going over the long run is to increase the wages of the bottom two-thirds of Americans. "
- Different - Not so much
- Good article - thanks.
- Reich is good. He's frequently on NPR.
- I remember him.
