<p>It is true, however, that income distribution in the developed world is a troubling issue. When stalwarts like “income equal” Japan are finding that their GINI coefficients are rising, one’s eyebrows have to twitch a teensy bit.</p>
<p>Real income measured with CPI, however, is pretty stagnant as of late, and I think has seen little or no growth since 2000. Then we have to ask whether or not the CPI is even capturing inflation well, something that many don’t believe.</p>
<p>Still, doom and gloom is a bit hasty. It’s not like $90/barrel oil is only affecting the US. Other economies are having to change their tune as well, including Big Bad China. Furthermore, even with all the problems we’re facing, the GDP is still humming along, and PPP is pretty healthy (whatever that actually means for the “average Joe.”) </p>
<p>And sjmom is right, we are all better off than we were even a few decades ago, but that may not be because of income per se.</p>
<p>To be fair, though, I’m not exactly thrilled to be job hunting right now. I think it would have been a better market last year… but c’est la vie. I’ll just have to work what I’ve got.</p>
<p>Anyone who has been in the Seattle market more than a year has done very well indeed. The appreciation over the last five years is close to 50%. If you give back even the 10% some are suggesting you are up 40% more or less. In another 10 years you will have forgotten all about that little dip just as we did around 2001 and 1994. The same home I lived in in 1991 that cost $130,000 would now sell in a week for $400,000+ (Greenlake 2/1 cottage blocks from the lake).</p>
<p>They want the rate cuts because there is some threat of a slowdown for all the reasons many have cited. The Fed has to get in front of it–it does not work if it comes in 6 mos late.</p>
<p>According to an article at CNNMoney.com, Massachusetts ranks 32nd in state and federal taxes. Maine is #1, California is #20, and Washington is #24. Retirees: time to flee to Delaware(#48), New Hampshire(#49), and Alaska(#50).</p>
<p>sjmom2329. the 70s were a very bad time for the economy. That’s why I voted for Reagan. Twice. No argument here. </p>
<p>I am socially liberal and fiscally conservative. I’m more fiscally conservative than your friend, Larry Kudlow. He likes to give tax breaks to those that don’t need them. :)</p>
<p>I worked hard for my money. I took risks. One of the things about our economy that is making me angry is the government and our economic system is so screwed up we are ruining the value of the currency. Since my wealth is denominated in this currency, I’m not too happy. The way our economy is run you have to take risks in situations that don’t make sense to stay ahead. That’s one reason we have problems now. All the investments in worthless paper, all this leverage, all these boprrowers that should never have been borrowers because they had no way to pay the debts back…what a ridiculous way to run an economy.</p>
<p>UCLAri, you are young. Don’t worry about this stuff.</p>
<p>This is what I study in grad school and what I’ll theoretically be paid to worry about. Besides, I find it interesting.</p>
<p>As far as your complaints about the worth of the economy, remember that with the end of Bretton-Woods also came flexibility. Even if it’s not working to great effect NOW, the fiat currency that we have now is arguably one of the major instruments of economic growth since the 1970s. </p>
<p>Besides, if all the finance work I’ve studied is any indication, we’ll see leverage scaled back for a while. I think a lot of companies saw cheap loans as an opportunity to achieve low WACCs and grow without thinking about the long-term costs of leverage vs. equity.</p>
<p>UCLAri, OK.
Deleveraging should occur. That’s what Wall Street, the banks and the politicians are worried about.</p>
<p>sjmom2329, if it makes you feel better, when I heard that Hillary Clinton wanted to give the mortgage holders $5 billion, I gagged. When I heard Obama wanted every senior with income under $50,000 to not have to pay income taxes, I gagged. Although, intellectually, I would like to see capital gains taxed the same as labor, I know it doesn’t work in the real world. So although, I like Edwards, I know his capital gains tax proposal, raising the tax rates I believe to 27%, won’t work. We will collect less in capital gains taxes under his proposal.</p>
<p>Yeah, paring back of leverage will happen, especially now that lenders are getting skittish about non-performing loans. In the end, though, I get the feeling that most companies won’t hurt much, and will instead go to equity financing (even though it’s less-than-optimal in many cases) for operations. </p>
<p>The ones who will hurt are individuals, who will find leveraging harder, even for legitimate reasons. I suspect that if I went to get a loan for some financial scheme, I’d get shut out pretty fast despite my decent credit rating.</p>
<p>Thanks for the thumbs up, by the way. I think I’ll need it. Unemployment may not be very high right now, but the easy job days of the late 90s and early naughts are long gone, leaving me with the cold hard reality of a much more “normal” job market, whatever that is.</p>
He likes to give tax breaks to those that don’t need them. :)</p>