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The Signs are Appearing
From the NYTIMES:
Public College Tuition Increases Prompt Concern and
Legislation
By KAREN W. ARENSON
From New York to California, the nation's public colleges and
universities have posted eye-popping tuition increases for
this fall.
Over the past several years I've been
discussing what I feel is my biggest fear: a diminishing
standard of living for the 1st World Middle Class.
Here's the outline of what I see:
STAGE 1:
Happening in Pockets (Normal Change)
Globalization > Pressure on
Pricing >"Spot "Deflation > Debt
Hourly Pay in U.S. Not Keeping Pace With Price Rises
By EDUARDO PORTER
The economy has added jobs almost every month this year,
but stagnant wages could hinder prospects for economic
growth.
The Outer Limits of National Debt
By ANNA BERNASEK (NYT)
SOMETIMES, if you stand too close to a picture, you
can't tell what it shows. That can be a particular
challenge for economists, who spend their days up to
their elbows in data.
STAGE 2:
Broad Adjustment by middle
class--hoping for return to good old days.
Cut costs-->Downsizing-->>Work Per
Person-->more family members working/time to make ends
meet-->Savings used to support lifestyle.
STAGE 3:
Failure to keep up, first with info,
then with life
Increased use of Credit Card Debt for
normal expenses usually paid with earnings-->Re-mortgaging of
Equity-->Using Credit Cards to bolster standard of
living-->Increased Total Debt without way out-->Bankruptcy Up
STAGE 4:
All Service Providers who depend on
"taxing" revenue raise fees, bureaucracies, education,
government.
Boosting government productivity
To pay for the care of the elderly, developed societies
face plummeting levels of public services for everyone
else—and soaring taxes. Productivity could be the
answer.http://www.mckinseyquarterly.com/links/15598
Lower Proceeds from Taxing
Revenues-->Institutional Inflation-->Mounting Pressure on
Fixed Income Lifestyle = ALL Middle Class are NOW Fixed
INCOME* and have been subsumed into a growing class of
Traditional Fixed Income Recipients: pensioners, social
security and retirees.
* Middle-Class Mobility is now
threatened as a result of dependence on fixed income, no
discretionary income, no choice-->declining lifestyle. The
informal economy is the only place to turn, yet is a
negative cycle!
The Myths of Informal Economy
The hidden dangers of the informal economy
Many companies around the world operate in the
"informal economy," in which they underreport
employment, avoid certain taxes, ignore product
quality and worker safety regulations, violate
copyright and intellectual-property laws, or
even fail to register as legal entities. The
problem is particularly acute in developing
countries, where companies that operate
informally produce as much as 80 percent of the
output in some industries. Few policy makers are
concerned, but they should be. By avoiding taxes
and regulatory obligations, informal companies
gain a substantial cost advantage that allows
them to stay in business despite their small
scale and low productivity and prevents more
productive, formal companies from gaining market
share. The result is slower economic growth and
job creation.
The take-away
Reducing the size of the informal economy would
generate huge positive economic gains. To reap
them, governments must correct the root causes
of informality—heavy tax burdens and complex
regulatory schemes—and enforce the law more
rigorously. |
STAGE 5:
Wider-Spread Unemployment, pockets of
deflation go wider, attempts to inflate taxing revenue
increasing rapidly...
Significant Cost Cutting-->15%
Unemployment--Increased Deflation as no one can raise price
except to rich. Unable to fund pensions because of poor
investing and turbulent investment climate created by mobility
of capital and growth in the informal economy among developed
nations. Developing nations are and have always been
ensconced in the informal economy.
STAGE 6:
Distance between haves and have-nots
creates 2nd world existence for 1st world middle-class.
Government Unrest-->Downshift of
memes-->Wider Default-->Fed Monetizing Debt & Expanding Money
Supply on wide scale-->Interest Rates Increase Dramatically to
retain foreign investment to keep Government afloat with
Massive/1 trillion dollar annual deficits.*
* Just so you know this is not
altogether bad for the wealthy, they get there cake and eat it
to: fixed income pensioners, corporations and government
monetizing debt to pension funds...earning higher interest,
illusion of increased well-being--possibly true in some cases,
as globalization provides cheaper products/ammenities as 2nd
World Expands Rapidly: India/China. Remember the wealthy
understand strategies for managing turbulence in financial
instruments.
STAGE 7:
Deteriorating "Bureaucratic Revenues garnered due to massive
trade deficits and capital flight...corporate flight, wealth
flight to investments in growing economies.
Government, Education, Healthcare (now
nationalized) increases taxes, blocks trade, subsidizes
businesses to stay (become state run?)-->taxes the
public-->Massive default on Credit Cards-->Bankruptcy
widespread in middle-class
STAGE 8: Era of
Discontent: permanent downshifts to lower level existence memes...
More pressure on taxing entities due
to lower revenues--cost cutting reduces services--crime
increasing assuring even more downshift--wealthy relocate due
to tax increases back to 50s (90%) if they haven't already
STAGE 9:
Full-fledged Middle Class Poverty--hyperinflation in U.S.
Middle-Class Disappears-->Poor vs.
Wealthy--> Government forgives all debt? Starts new money
system?
Widespread violence?
Drastic losses in all industries and
the fracturing of wealth on all levels.
STAGE 10:
Recovery?
Who knows if we can recover.
The world will be different and it
will occur within the next 2 - 10 years. The US may become 2nd
world country OR AGGRESSOR creating wide-spread global
depression, instability, or worse.
Okay, this is pretty grim I'd say if
you're middle class, but quite frankly there is sufficient
information about cycles and people to see this being enough
of a real scenario that one should begin to pay attention to
certain things and not leave it up to the government.
The trigger has already occurred:
globalization.
It can't be stopped. It can be
slowed, but is inevitable in a capitalistic world.
I did not cover the details, but I hit
what I think are the leading indicators and the NYTIMES piece
is showing up as a STAGE 4 Warning.
This is serious business folks!
I don't go into all the things that
are taking place to lower the middle-class standard of living,
but surely you see paying more for education as one of those
issues!
Walker Information Group's
Loyalty Report for
Loyalty in the Workplace finds that only 30 percent of 2,400
respondents feel truly loyal -- committed, motivated and
happy in their current job. A majority of employees say they
feel trapped, working for their employer because they have
to, not because they want to.
What's worse is where the solutions
lies...that tells me my thinking is spot on. Where is
the government going to get the money? YOU! Or steal it
from your children's standard of living through debt!
No one's getting out of this
one...alive!
So, hopefully you can still smile at
my last comment?
There are all kinds of scenarios in my
view that would change the above, although many can't stop it
from occurring as you must understand the business of cycles.
Nothing is immune, the only answer is
to evolve.
Yet, I see no large movement of
evolution "except" devolution.
Just a quick piece and then I'm out of
here for today:
The following vMEMEs "may" resolve the
life-conditions in the following ways:
Beige: Survival of the Fittest
Purple: Tribal Safety (Networking as a
modern response at Turquoise)
Red: Take what they need
Blue: Imposition of Right on All
Orange: Get out of middle class (upper
1%)
Green: Peace and communal living
Yellow: Construct Barriers to Losing
Existence Systems
Turquoise: Small isolated groups (monastery-like)
Coral: May...just may be the answer,
but I doubt it, they will achieve self-awareness and not be
interested in leading macro change.
Teal: Achieving the human non-dual
state, will ride with the waves realizing non-action in field
bounded by the flow of energy.
Beyond, humans will cease to exist
independently...
another form of consciousness will
evolve that may or may NOT include homo-sapiens as the species
of choice--or may just prefer to keep it alive as a symbiont--that
is if the microbes or the machines don't get us first!<G>
There is no one answer...there are
answers when buffered by a new "globalcommon" sense, but that
is unlikely to occur until STAGE 10, if at all.
My hope is that we could reach the
life-conditions necessary with the brain syndicate appropriate
to realize that what we're doing won't work and try another
evolutionary path.
My sense is that it won't happen
because even in my own experience with wonderful people,
underneath it all, lies the ego in wait...and that ego will
not allow freedom to be given to all...as it seeks its own
freedom.
If you review history, no paradigm
shift in a universal way has occurred without significant
strife, bloodshed or fighting. To introduce a new
paradigm, one must be willing to fight for it, to make it
happen, yet this flies in the face of the necessary egoforce
as the ego reflects back on itself, to both fight and die at
the same time.
Now, fighting in the most advanced
sense may not mean physical fighting (got you there didn't
I)--it may involve the revolution created through the
liberation of the ego, YET, the majority of the world will not
permit that to occur.
Yes, I do agree there will be an
evolution of consciousness, but it won't be in the form that
many of the green practitioners would like it to take place.
Ok, enough, I'm almost depressed!
Although for me, depression subsides quickly when I realize
this doesn't have to be if I take action and influence others
to take action.
I'll probably do like most...protect
my own hide while I rant about the winds of change.
However, being on the warm side of things, I don't plan to
allow myself to go back to certain things....certain things
about the old days are unappealing, especially when I am 60
years old!
If you are interested in working with
me on this evolution of consciousness--join our community at
http://www.b-coach.com,
it may not sound like the answer, but it is a vehicle for
solutions.
Mike Jay, Labor Day Weekend 2003
PS: Please send me your comments
here
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