Posted on 05/03/2012 9:40:34 AM PDT by Why So Serious
Rahm Emmanuel just forced the unions in Chicago to except the following ... every new hire is going to be paid $20.00 per hour versus the old $33.00 [39% reduction]. These new hires used to be on probation for six months. Now? Four years. So, with the city employees required to live in the city and their income being reduced by 39% that will reduce their ability to buy a house, at least at rising prices. Since housing has skidded to a halt most carpenters, electricians, and plumbers are sitting at home. Those guys guys made between $32-27 per hour. IF and when they start working again those wages will be in the $20 area. So where is all the inflation going to come from? Figure now that with a 39% reduction in labor wages that it will take at the minimum 1.4 jobs of new to equal the income tax receipts of 1 from yesteryear. Without wage inflation there is NO INFLATION. Higher cost of living? Sure. That will be fixed by changing the way we live, not by higher wages. And government, like the rest of us will have to do more, with less!
Great post! I’ve puzzled over this myself for quite some time and have surmised that the “inflation” I’m seeing in fuel and food prices is a function of the declining global purchasing power of the currency combined with the fact that just as our wages are becoming ever more a function of globalized economics, so are our commodity prices. The whole idea as envisioned by the Global Elites that run the world is to do away with first and third world countries by raising third world countries to second world status by bringing first world countries down to second world status. Its working remarkably well.
Inflation is an increase in the size of the money supply. If the fed is printing more dollars, it doesn’t matter if it goes to a new hire, a retired teacher, a T-bond holder, or a Chinese venture capitalist. If international commodities (lumber, iron, apples) go up in cost, that is a sign of inflation.
I have said for years that instead of bringing third world toilets up to our status their goal has always been to bring us down to theirs.
I agree, its working.
Great for the rest of the world, but horrible for America!
The housing market is in a depression, yet they have pumped up the monetary supply so high that commodity prices, gas & food for example, are through the roof.
So you can have both inflation and deflation simultaneously in an entire economy. In our economy those products that are necessary are inflating, while home ownership is dropping.
You also have a misnomer, as most civil servants do, about the \nature of government workers. ALL government workers are a net drag on the economy as they take more out of the economy that they put into the economy. Only private sector employees ADD net positive economic activity. That is why we MUST LIMMIT the size of government to the absolute minimum needed.
Inflation is not really increasing the size of money supply, it is more stripping a currency of its purchasing power. Most often done with a printing press. Oil has not double in value, the purchasing power of that dollar has been cut in half. Central bankers are awesome. They do it and the oil speculators get blamed.
Not the real definition of inflation. It is the velocity of money. There is no such thing as too few goods. There are 2.5 Billion people on the Asian continent that will make anything you want for a nickel and a bowl of rice a day. That part of the equation has been destroyed. The drop in labor cost is great that it has more than offset any increase in the money supply. Fact is, that with all the money printed we are still in a severe deflationary spiral. Not to mention the internet and its affects. This is the largest deflationary mechanism in the history of man. And we have yet to feel the full affects.
When all the countries of the world are roughly equal economically, it will be easier to organize a world government.
You are correct on us agreeing, Dr.
Of Course, we will all be eating out of the governments bowl. We are all serfs!
The massive deflation is mainly in real estate which was over inflated by poor government policies that caused an excess supply of buyers, many of whom had no business being involved in home ownership.
The continued slow deflation in real estate is because of the government trying to keep the bottom from falling out. they continue to pump in cash in the hopeless desire to forestall the inevitable. This coupled with unemployment and under employment of close to 20%, one in five adults, makes home ownership continue to fall. In some areas, ;like my own. The bottom has been reached. We never inflated greatly, so we never dropped greatly. We are now seeing home sales growing, and real estate values rising from the bottom. This even after the residency requirement for the City of Cleveland workers has been lifted. THIS IS ONLY IN MY AND A FEW OTHER AREAS OF THE METRO! Some of the exurbs saw a massive drop in values. In one exurb the % of +90 day delinquencies (IE: Foreclosures & potential foreclosures) reached close to 1 in 4.
Conversely the massive influx of dollars has the direct effect of inflating commodities: Food, metals, raw materials.
That is just my interpretation of the ugly science, which is at least as correct as anybody that advises Obama. Nobody really knows, which is why the best economy is one with very little involvement of government.
Emmanuel is running Chicago as a fiscal conservative as is Preckwinkle at the Cook County level.
Emmanuel is looking to privatize a lot, including the old patronage garbage pick-up jobs.
inflation is meaningless if you don’t have a job in the first place.
Income tax receipts meaningless if you don’t have a job.
Back to the laffer curve.
Accept a lower wage or don’t work ? no so tough a choice.
I agree with the Emmanuel/Preckwinkle approach to governance, with one exception.. after they do all their conservative stripping they are still going to come after my hard earned dollars. I left Chicago/Cook and you can find me just west of the county line in Will
I agree with the Emmanuel/Preckwinkle approach to governance, with one exception.. after they do all their conservative stripping they are still going to come after my hard earned dollars. I left Chicago/Cook and you can find me just west of the county line in Will
Should be an interesting conversation when I meet up with him again in the hereafter.
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