Sunday, January 25, 2009

60 Minutes: Economic Storm Batters Ohio Town

Here is what is happening in "real America" ... away from the punditry calls for "2nd half recoveries" and "impending rebounds in housing" and "if you just give people cheap credit we can go back to 2006 spending levels" nonsense. This is case in point on why my version of "the recovery" is far more likely than the punditry's [The Economic "Recovery"]

We actually spoke about this Ohio town in November [Nov 12: AP - DHL Firing Devastates Ohio Town]

Speaking of Ohio, in case you missed it DHL is cutting 9500 US jobs - and it seems the great majority (7000) are in one town in Ohio: Wilmington. Just a devastating blow.

Keep in mind in a "service economy" when 10 jobs are lost, it affects every other service worker (the hairdresser, the waitress, the dog groomer, the tax accountant, the bowling alley) in a very perverse spiral. So as we've shipping off all these old school manufacturing jobs the past 3 decades (who needs 'em!) we can now look around at each other and wait for the government to step in so we can go back to cutting each other's hair, providing "new and innovative financial services", mowing each other's lawns, approving gosh awful mortgage applications, and await the next bubble the government will create to provide the next illusion of prosperity. Go Team Economy!

Next bailouts? State's unemployment funds ... [Dec 19: New York Times: States' Funds for Jobless Dry Up] Where is the money coming from, since the federal government is also broke? The air.... or our friends overseas.

13 minute video - just keep repeating: "tax cuts solve everything, especially for those with no income" and "richest country on Earth" (as long as you exclude debt of course). The standard of living in America continues downward [Do the Bottom 80% of Americans Stand a Chance?] and the first generation who will not live like their parents awaits. On the plus side office designers for Wall Street financiers are living it up... with the tax money from those who are suffering. Reverse Robin Hood.

When President Obama spoke of "the winter of our hardship" in his inaugural address, no one in America understood that better than the folks 60 Minutes met in Wilmington, Ohio. They're people in the grip of a brutal series of layoffs at DHL, the shipping company. Their experience was part of the news this past week that new claims for unemployment benefits are the highest in 26 years.

Since the economic crash of 2008, taxpayers have committed to more than $1 trillion in various bailouts of Wall Street. But not much of that is reaching families in crisis. On kitchen tables, headlines from Washington and New York lie beside unpaid tuition bills and foreclosure notices. After all the speeches and parties of Inauguration Day, what were the families in Wilmington asking?

"Are we going to lose our home? Are we going to be able to pay our property taxes? What are we gonna do for insurance? What are we gonna do for food? You know, and these are questions that you'd never think that we'd ask yourself. And now they're discussions in the home," says Mike O'Machearley, who is losing the job that helped support four children and a grandson.

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