Here's an idea: instead of driving to the movie theater, or restaurant, or tavern, how about riding a bike there instead? Instead of buying a home you can't really afford 60 miles from work, how about renting an apartment 5 miles from work and saving your money until you can actually afford a place?
An increase in travel by air is also a contributing factor to our increase use of fuel.
Another, many corporate headquarters have moved from the city to the suburb, causing employees to drive to work rather than use of public transportation. Many live in the city and must commute to the suburbs to get to work.
More vehicles on the road, additional tollbooths requiring fees to be paid, all add to wasted fuel consumption. Also, let's not forget the DRIVE THRU WINDOW. This 'value added' convenience is very costly since an idling vehicle continues to burn gasoline.
It is suggested that if you will be idling for 60 seconds or more, Turn Off Your Car. Idling at railroad crossings, and long traffic lights is wasteful.
Maintain your vehicle according to the manufacturers suggestions. Changing your oil and air filter regularly will aid in maintaining efficiency.
During the first Bush recession in '01, my 401k lost nearly half its value. It took the next 5 years just to catch back up. There was a joke going around that the 401k is now the 201k - not real funny is it
PBS ran a Frontline program a while back and they showed that time and time again the defined benefit style pension outperformed the 401k style pension.
The 401k was not originally intended to replace, but to supplement the traditional plan. But it soon became another way for companies to relieve themselves of the responsibility of maintaining a tradtional defined benefit plan.
The main problem with the 401k is that it is too economy depenedent - if the economy sucks when you plan to retire you are pretty much screwed - you will have to just keep working - either till the value creeps back up or to supllement your meager retirement with a part time job.
As your articel indicates the 401k is just yet another scehme for wall street to get average joe to give them more money to play with, and subsidize their risky behavior.
Todays schools churn out mostly "mercenary" MBAs who only know how to close plants, chop budgets, outsource and downsize. There is no creation or innovation or building up.
Last I checked Americans have negative savings, meaning they are already living on credit cards, loans. So, whether it's a sudden collapse or a long drip, drip, drip, I think all are reaching a similar conclusion, the US is losing it's first world economic status and it's due to messed up, corporate written policies.
I believe the debate is all about timing and slope of the downward spiral.
(at least on here, but we're not exactly a corporate public relations sounding board!)
Assuming for a moment that we are heading into an economic depression, does that automatically equate to armaggedon? We've gone through other depressions before, it is at the end of the day, the cyclical nature of the game we are all thrusted in. Inflation, or specifically the causes of such, could come from commodities. But then we enter the realm of elasticity, which of these resources has the least of which and which has the most? I would argue, that outside of the grains for food, that surprisingly oil is the most elastic. Already we are hearing reports of the Saudis losing buyers and that could have been the real reason for their sudden drop in their offering. One could cite China, but eventually people will say no there and find other means of transportation. The same could be said here as well, I might add.
Eventually, though, add in the fear of rising prices and job losses, and we lose demand to participate in the economy. In our case, that being of consumption, we won't see an increase in personal spending. Well, no, let me correct myself, you could, but that could simply be a by product of rising prices versus increased number of goods and services purchased. But overall demand will eventually deflate. The problem then becomes, if one cannot buy X, can they sustain themselves on Y? If I normally go out to eat, but because of a job loss, can I simply eat at home? Will my savings cover such an expense? If there is no savings, then things get prickly.
I feel sorry for conservatives because as we've seen even on here, they mix social agenda that is simply not palatable with most of America. There are also paleo-conservatives who really have a lot of good economic policy and observations and one of the reasons this site is non-partisan officially. They too are looking at the statistics and are horrified by US trade policy, tax policy and the budget deficits.
Then, unfortunately the corporate agenda people like to mask themselves as conservatives, but they really are not and they use the social wedge issues to advance their corporate agenda.
The left has the same thing going on. Use of name calling all sorts of things as racist and so on when in reality it's a corporate global agenda.
My hope is that these two schools of people looking at the realities on the ground for the US economically and the people of the United States can, through common consensus points agree to advance policy that is in the US interests, the middle class interests for playing this game on name calling wedge issues is one of the reasons we're in the mess we are in in my opinion.
There are a couple of ongoing debates on EP and on the economic blogs generally. One is Economic Armageddon or no? and the second is are commodities futures speculators the main cause of a oil price bubble?
That said, one thing I note generally is that global economics isn't discussed much and especially global labor markets isn't well understood.
One can have good economic indicators and still lose jobs because of global labor arbitrage. For example, even though one has job losses, the productivity from those offshore outsourced jobs is calculated into US firms, incorporated in the United States, productivity figures. So, the corporation can "go up", while the U.S. middle class "goes down".
Now they may not be migrating as much jobs, but in terms of creation of jobs overseas, well, that won't even show up in the BLS stats at all. So, a job that should be created in the United States instead is created overseas, wala, job losses, yet the stock market recovers and the corporate profits recover. Obviously there is a long steady erosion for the US economically because it is a consumer society and there is only so long one can wipe out the economic livelihoods of a nation-state and except to remain a 1st world economy and we might be at that tipping point, but it's a long dribble from what I've been watching so far. (I'm in the long dribble economic conditions vs. the Economic Armageddon camp because of this).
Firstly, social "conservatism" is not appropriate for this site and is probably offensive to many on this site, myself included. We assuredly are not social conservatives. Secondly, this site is about economics, most assuredly not about social issues. But that said, most of the bloggers are Progressives and thus believe in the right to choose. Thirdly, this site is most assuredly not anti-choice, although as admin, discussions like that aren't going on here.
Here's why:
The Constitutional Party speaks for those left out of "modern" 2-party America. For Social Conservatives, they're more pro-life (up to and including CATHOLIC pro-life) than the Republicans in that they're against preemptive wars and the death penalty, as well as abortion and euthanasia.
For the middle class destroyed by trade deals, they're for a self-sufficient America.
For the lower class harmed by illegal immigration, they're for actually using the Department of Defense for DEFENSE- and closing the borders.
For the Green crowd, they're for opening up research into energy independence, sustainable energy, and ambient energy generation.
And for the economists- they're for a return to non-deficit, pay as you go spending without borrowing money from anybody.
In other words, they're for all the stuff the Republicrats and Demonicans are afraid to do for fear of killing the golden goose of campaign contributions (or as I like to call them, Bribes).
Guess what college educated? Your careers, wages, job security have declined extensively also! That's right, no longer is a college degree a guarantee of income stability or a career.
For people who are so called college educated you would think they would be aware of these fundamental statistics!
You know what this creative class has shown me personally? That our university system must be sorely lacking in objective, independent reasoning and analysis.
These people have their heads up their ass frankly. It is the Midwest, working America who know exactly what's going on. They are smarter than everybody and they also know first hand how the United States is being sold down the river and exactly what should be done about it.
What asshole (or should I say public relations person) decided that Americans should be denied a good job and economic security as a basic right? As I recall FDR mentioned this as a basic right in the United States.
I wish we had someone viable for 3rd party for lord knows they would win with some good economic positions alone.
McCain is hilarious to run around touting more bad trade agreements and with the queen of offshore outsourcing, Carly Fiorina.
My suggestions have been to focus in on Congressional races.
This is yet another myth, this creative class to avoid tackling the real economic issues that are most pressing in the United States. Frankly it makes me embarrassed to be educated for I sure don't want to be included. The only thing I can think is people are young and because it has not happened to them yet the concept of there for the Grace of God Go I has not been contemplated.
Obviously I'm not an economist but sometimes I think the theory, mathematics isn't well developed enough. For example, the "two variable" causality view. I also wonder if there are regions of variable "influence" in whether the economy is at full functionality or repressed.
Wow, this is a complete acurate review, I wonder how many people are actually aware of these aspects... It's true that the housing and mortgage industry is facing instabilities, this is one more reason we should pay more attention to future trends and start acting more cautious. I could use a mortgage calculator right now.
I would have thought hyperinflation would be caused by our massive trade deficit, increasing the money supply generally and the US currency no longer being used as a reserve currency and other nations decoupling from the US.
There are a lot of doomsday sayers out there right now it seems. I mean it sucks and what they have been doing is outrageous, but I sure don't see Germany at the end of WWI here.
I am agnostic on the sky is falling right now but those warnings I sure don't remember seeing such dire words and that includes the dot con crash, which most people knew would happen. I did a few posts on here about default credit swaps and hidden losses. Just how bad are these is the question and seemingly various unregulated vehicles no one knows. I think that is the worst of it, we're having multiple topics on EP right now and we just simply cannot find straight answers because so much is hidden.
:) I think it's absurd to dump off of people trying to manage such complex investment instruments, which they do regardless by these methods. It becomes yet another blame game as a method to psychologically put people as the other....well, so and so is too stupid (and thus deserves x) or so and so didn't exercise (and thus deserves to get cancer) or so and so didn't pay attention (and thus deserves to lose their career). It's like a gigantic survivor game and I've often wonder if all of these psycho reality shows are corporate sponsored, trying to convince Americans that this is all normal as a society.
John Bogle of Vanguard Funds fame wrote a compelling article about just how awful individual investors are over time. Here's an important sample:
The returns incurred by the average equity fund investor since 1984 have averaged just 2.7% per year, a shocking shortfall to the 9.3% return earned by the average fund. The result is that the average fund investor has earned less than one-quarter of the stock market’s 12.2% annual return. Compounding these annual returns over the 1984-2002 period presents a dramatic picture of the plight of the typical mutual-fund investor: As the chart nearby shows, $1,000 invested at the outset would have produced a profit of $7,910 in the stock market itself, a profit of $4,420 for the average equity fund, and a profit of just $660 for the average equity-fund investor.
What really stands out is that the average mutual fund investor only earned 2.7% a year during that time.
It is a principle of American life—practically gospel—that you know better than anyone what to do with your money. The idea of privatizing Social Security is based on the notion that you'll invest your savings better than the government would. The ascendance of 401(k) plans over guaranteed employee pensions has the same foundation—that employees will make informed and prudent decisions when they invest.
[It's Not True!]
This is a problem that is beginning to be recognized. Since 1964 Nebraska offered state employees the chance to manage their 401(k)-type plan. Extensive employee education and training seminars were given, and everyone expected outstanding investment returns. But when the state audited the program in 2000, the results were incredibly discouraging—employees were making bad investment after bad investment. So in 2003, Nebraska eliminated employee choice from its 401(k) plan.
Pension funds directed by trustees achieve results that are about 50 percent better than those achieved by individual investors—even though trustees are not professional money managers. So why do individuals invest so poorly compared to institutions? ....
individual investors commit[ ] the classic market sin of chasing performance.... Individual investors ... pour their money into [high flying market sectors]. History shows today's high-performing funds are tomorrow's laggards, so individual investors are choosing investments that are likely to disappoint. Similarly, research shows that individual investors tend to sell securities that will have the highest future returns.
....[Also], Individual investors don't purge their bad investments, allowing poor performers to pile up in their portfolios. Pension trustees also do better because they usually engage professional advisers or consultants to help them make decisions.
The final reason individual investors do relatively poorly is ...trustees behave more rationally than individuals not because they are more financially sophisticated, but because they are more scared. Trustees have to answer for their decisions to a superior or a committee. It is very hard to hold a money-losing investment if your boss is holding you partially responsible for it....
So does this mean 401(k) plans are a mistake, that individual investors are doomed to earn poor returns on their stock market investments? This is an important question for policy-makers to consider.... If employees are earning only half of the market averages, that means that in coming decades, there could be serious shortfalls in income for retirees....
Articles like these demonstrate with brutal facts why Social Security must never be privatized, and why individually directed 401k plans are doomed as a retirement vehicle for average workers.
The classic defined-benefit pension plan may not be making a return, but employees should demand portable defined-contribution pension plans with a minimum guaranteed return. Professional management of a group's assets are far more likely to yield superior returns over the long run, and is a much more suitable retirement vehicle. Mandating such plans should be part of a progressive or populist agenda.
They were a poorly thought-out concept to begin with.
Here's an idea: instead of driving to the movie theater, or restaurant, or tavern, how about riding a bike there instead? Instead of buying a home you can't really afford 60 miles from work, how about renting an apartment 5 miles from work and saving your money until you can actually afford a place?
An increase in travel by air is also a contributing factor to our increase use of fuel.
Another, many corporate headquarters have moved from the city to the suburb, causing employees to drive to work rather than use of public transportation. Many live in the city and must commute to the suburbs to get to work.
More vehicles on the road, additional tollbooths requiring fees to be paid, all add to wasted fuel consumption. Also, let's not forget the DRIVE THRU WINDOW. This 'value added' convenience is very costly since an idling vehicle continues to burn gasoline.
It is suggested that if you will be idling for 60 seconds or more, Turn Off Your Car. Idling at railroad crossings, and long traffic lights is wasteful.
Maintain your vehicle according to the manufacturers suggestions. Changing your oil and air filter regularly will aid in maintaining efficiency.
We have talk of a GM bankruptcy.
During the first Bush recession in '01, my 401k lost nearly half its value. It took the next 5 years just to catch back up. There was a joke going around that the 401k is now the 201k - not real funny is it
PBS ran a Frontline program a while back and they showed that time and time again the defined benefit style pension outperformed the 401k style pension.
The 401k was not originally intended to replace, but to supplement the traditional plan. But it soon became another way for companies to relieve themselves of the responsibility of maintaining a tradtional defined benefit plan.
The main problem with the 401k is that it is too economy depenedent - if the economy sucks when you plan to retire you are pretty much screwed - you will have to just keep working - either till the value creeps back up or to supllement your meager retirement with a part time job.
As your articel indicates the 401k is just yet another scehme for wall street to get average joe to give them more money to play with, and subsidize their risky behavior.
Todays schools churn out mostly "mercenary" MBAs who only know how to close plants, chop budgets, outsource and downsize. There is no creation or innovation or building up.
Last I checked Americans have negative savings, meaning they are already living on credit cards, loans. So, whether it's a sudden collapse or a long drip, drip, drip, I think all are reaching a similar conclusion, the US is losing it's first world economic status and it's due to messed up, corporate written policies.
I believe the debate is all about timing and slope of the downward spiral.
(at least on here, but we're not exactly a corporate public relations sounding board!)
Assuming for a moment that we are heading into an economic depression, does that automatically equate to armaggedon? We've gone through other depressions before, it is at the end of the day, the cyclical nature of the game we are all thrusted in. Inflation, or specifically the causes of such, could come from commodities. But then we enter the realm of elasticity, which of these resources has the least of which and which has the most? I would argue, that outside of the grains for food, that surprisingly oil is the most elastic. Already we are hearing reports of the Saudis losing buyers and that could have been the real reason for their sudden drop in their offering. One could cite China, but eventually people will say no there and find other means of transportation. The same could be said here as well, I might add.
Eventually, though, add in the fear of rising prices and job losses, and we lose demand to participate in the economy. In our case, that being of consumption, we won't see an increase in personal spending. Well, no, let me correct myself, you could, but that could simply be a by product of rising prices versus increased number of goods and services purchased. But overall demand will eventually deflate. The problem then becomes, if one cannot buy X, can they sustain themselves on Y? If I normally go out to eat, but because of a job loss, can I simply eat at home? Will my savings cover such an expense? If there is no savings, then things get prickly.
I feel sorry for conservatives because as we've seen even on here, they mix social agenda that is simply not palatable with most of America. There are also paleo-conservatives who really have a lot of good economic policy and observations and one of the reasons this site is non-partisan officially. They too are looking at the statistics and are horrified by US trade policy, tax policy and the budget deficits.
Then, unfortunately the corporate agenda people like to mask themselves as conservatives, but they really are not and they use the social wedge issues to advance their corporate agenda.
The left has the same thing going on. Use of name calling all sorts of things as racist and so on when in reality it's a corporate global agenda.
My hope is that these two schools of people looking at the realities on the ground for the US economically and the people of the United States can, through common consensus points agree to advance policy that is in the US interests, the middle class interests for playing this game on name calling wedge issues is one of the reasons we're in the mess we are in in my opinion.
There are a couple of ongoing debates on EP and on the economic blogs generally. One is Economic Armageddon or no? and the second is are commodities futures speculators the main cause of a oil price bubble?
That said, one thing I note generally is that global economics isn't discussed much and especially global labor markets isn't well understood.
One can have good economic indicators and still lose jobs because of global labor arbitrage. For example, even though one has job losses, the productivity from those offshore outsourced jobs is calculated into US firms, incorporated in the United States, productivity figures. So, the corporation can "go up", while the U.S. middle class "goes down".
Now they may not be migrating as much jobs, but in terms of creation of jobs overseas, well, that won't even show up in the BLS stats at all. So, a job that should be created in the United States instead is created overseas, wala, job losses, yet the stock market recovers and the corporate profits recover. Obviously there is a long steady erosion for the US economically because it is a consumer society and there is only so long one can wipe out the economic livelihoods of a nation-state and except to remain a 1st world economy and we might be at that tipping point, but it's a long dribble from what I've been watching so far. (I'm in the long dribble economic conditions vs. the Economic Armageddon camp because of this).
Firstly, social "conservatism" is not appropriate for this site and is probably offensive to many on this site, myself included. We assuredly are not social conservatives. Secondly, this site is about economics, most assuredly not about social issues. But that said, most of the bloggers are Progressives and thus believe in the right to choose. Thirdly, this site is most assuredly not anti-choice, although as admin, discussions like that aren't going on here.
Chuck Baldwin and the Constitutional Party.
Here's why:
The Constitutional Party speaks for those left out of "modern" 2-party America. For Social Conservatives, they're more pro-life (up to and including CATHOLIC pro-life) than the Republicans in that they're against preemptive wars and the death penalty, as well as abortion and euthanasia.
For the middle class destroyed by trade deals, they're for a self-sufficient America.
For the lower class harmed by illegal immigration, they're for actually using the Department of Defense for DEFENSE- and closing the borders.
For the Green crowd, they're for opening up research into energy independence, sustainable energy, and ambient energy generation.
And for the economists- they're for a return to non-deficit, pay as you go spending without borrowing money from anybody.
In other words, they're for all the stuff the Republicrats and Demonicans are afraid to do for fear of killing the golden goose of campaign contributions (or as I like to call them, Bribes).
Even though I qualify for the creative class.
Guess what college educated? Your careers, wages, job security have declined extensively also! That's right, no longer is a college degree a guarantee of income stability or a career.
For people who are so called college educated you would think they would be aware of these fundamental statistics!
You know what this creative class has shown me personally? That our university system must be sorely lacking in objective, independent reasoning and analysis.
These people have their heads up their ass frankly. It is the Midwest, working America who know exactly what's going on. They are smarter than everybody and they also know first hand how the United States is being sold down the river and exactly what should be done about it.
What asshole (or should I say public relations person) decided that Americans should be denied a good job and economic security as a basic right? As I recall FDR mentioned this as a basic right in the United States.
I wish we had someone viable for 3rd party for lord knows they would win with some good economic positions alone.
McCain is hilarious to run around touting more bad trade agreements and with the queen of offshore outsourcing, Carly Fiorina.
My suggestions have been to focus in on Congressional races.
This is yet another myth, this creative class to avoid tackling the real economic issues that are most pressing in the United States. Frankly it makes me embarrassed to be educated for I sure don't want to be included. The only thing I can think is people are young and because it has not happened to them yet the concept of there for the Grace of God Go I has not been contemplated.
Obviously I'm not an economist but sometimes I think the theory, mathematics isn't well developed enough. For example, the "two variable" causality view. I also wonder if there are regions of variable "influence" in whether the economy is at full functionality or repressed.
Wow, this is a complete acurate review, I wonder how many people are actually aware of these aspects... It's true that the housing and mortgage industry is facing instabilities, this is one more reason we should pay more attention to future trends and start acting more cautious. I could use a mortgage calculator right now.
I would have thought hyperinflation would be caused by our massive trade deficit, increasing the money supply generally and the US currency no longer being used as a reserve currency and other nations decoupling from the US.
There are a lot of doomsday sayers out there right now it seems. I mean it sucks and what they have been doing is outrageous, but I sure don't see Germany at the end of WWI here.
I am agnostic on the sky is falling right now but those warnings I sure don't remember seeing such dire words and that includes the dot con crash, which most people knew would happen. I did a few posts on here about default credit swaps and hidden losses. Just how bad are these is the question and seemingly various unregulated vehicles no one knows. I think that is the worst of it, we're having multiple topics on EP right now and we just simply cannot find straight answers because so much is hidden.
:) I think it's absurd to dump off of people trying to manage such complex investment instruments, which they do regardless by these methods. It becomes yet another blame game as a method to psychologically put people as the other....well, so and so is too stupid (and thus deserves x) or so and so didn't exercise (and thus deserves to get cancer) or so and so didn't pay attention (and thus deserves to lose their career). It's like a gigantic survivor game and I've often wonder if all of these psycho reality shows are corporate sponsored, trying to convince Americans that this is all normal as a society.
His criticism forced me to change a couple of my links and tighten up my diary so it was more accurate.
but if you are going to panic, Panic First!
At least that is how I've always heard the saying. ;-)
John Bogle of Vanguard Funds fame wrote a compelling article about just how awful individual investors are over time. Here's an important sample:
What really stands out is that the average mutual fund investor only earned 2.7% a year during that time.
Simply put, you suck at investing:
Articles like these demonstrate with brutal facts why Social Security must never be privatized, and why individually directed 401k plans are doomed as a retirement vehicle for average workers.
The classic defined-benefit pension plan may not be making a return, but employees should demand portable defined-contribution pension plans with a minimum guaranteed return. Professional management of a group's assets are far more likely to yield superior returns over the long run, and is a much more suitable retirement vehicle. Mandating such plans should be part of a progressive or populist agenda.
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