Republican mantra says that we must support corporations (tax breaks, favorable legislation) because healthy corporations will keep our economy strong. In light of the current decline in the real income of the middle class, AnneElizabeth, in her KOS Diary, has a different take:
|I bet many major american-based corporations feel little "loyalty" or responsibility to this country. If fact, wasn't the head of Dell or Cisco, some high tech company, quoted as saying late last year that he didn't want his company to be thought as "American" anymore, but as a "world" company. The underlying message being "don't count on us for jobs". I say fine- no job creation, then no special tax breaks, no offshore shell corporations for you.|
What these guys don't get, is that at some point, the middle class American consumer cannot be relied on to keep on buying, especially as their incomes keep dropping. The American middle and working class consumer has supported corporate profits and shareholder returns with uprecedented levels of credit card debt. So when the shit hits the proverbial fan, and US consumers put the brakes on spending, whose going to pick up the spending slack? Workers in China and India? Yes, their job growth has been substantial, but based on low wages. They're not going to want our companies stuff either. And, the Europeans will try to avoid our stuff if they can help it. Its a house of cards, it going to fall and, unfortunately, the chump American worker is going to get buried.
Today on CBS's "Sunday Morning" was a brief glimpse at the rabid fanaticism underlying the current real estate boom (esp. single-family homes). The lenders are setting up many ignorant home buyers for financial ruin by supporting an overpriced market with easy lending. The market is so obscenely overpriced and buyers so fad-struck, the longer this market rises, the more intense and devastating will be the inevitable crash. Combine this with the house-of-cards economy to which AnneElizabeth refers, and your best bet at this time is probably selling your recently-purchased house, buying that replacement car now (while interest rates are still low) and putting your savings into safe securities.