A few days ago a friend of mine confided that she did not have a raise in 10 years, and now her company is cutting her hours.
My friend is a physical therapist.
I am an owner of a tiny business in a completely different field. My income is neither wages nor salary. It is the net profit from my business. Yet I have the same predicament. My income remained flat for 12 years.
When I was single, living in a posh building in a posh part of town and paying $900 in monthly rent, which included utilities, that was a pretty good income, and I was certainly a middle class girl.
Moreover, my income increased steadily through the nineties, and I was certain of a decent future for myself.
I was so certain, in fact, that I did not bother to save for a rainy day.
I did whole a lot of traveling, skiing, and other fun things.
Then I got married, had a kid, moved to a cheaper part of town where I got an apartment twice as big for monthly rent just a bit higher than my previous digs.
My income remained the same because my subcontractors kept raising their rates but my clients began to cheapen out. Excuses were understandable: we did have a recession in 2000, then in 2001 (“9/11″), then in 2003, etc.
I probably could get out of my shell and get more clients to increase my income, but my kid and failing marriage kept me busy.
Then in the fall of 2007 I finally became a single mom, and 2 months later the FINANCIAL CRISIS hit me (my business is closely related to the insurance industry so I’ve experienced the crisis long before the rest of America did).
In 2008, my income went down significantly. So now I had no choice and got out of my shell, and got myself many more clients. I have also reduced rates of my subcontractors.
Yet my income did not jump. It simply went back to the pre-crisis level, because I had to cut my rates also. Everyone is in the bind.
I am not even talking about payment time-table that is now 4 times as long. Before the crisis, if a company took 2 months or longer to pay, I was on their case already. Now I don’t even bother with inquiries till 4 months past due.
It is my flat income that gets me, because my life is twice as expensive now. My rent now is $1510/mo, plus utilities that are twice what they used to be in 2000. My ground phone line that I use for fax only is also twice of what it used to be in 2000. So is my transportation expense, internet, my cell phones, etc.
My monthly grocery bill has grown now more than twice, even though my son and I eat much less than my ex (it used to be that half of my monthly grocery budget went to his propitiation).
In other words, it takes now twice the amount of dollars to cover living expenses, and they say there is no inflation.
There is no inflation, because our incomes have deflated.
It used to be that incomes would grow almost at the same rate as inflation of overall prices. It was called inflation, and was supposed to be a bad thing for economy.
Now I miss inflation. Because the value of my dollar has shrank 50% or more, but I don’t have more paper in my wallet to make up the lost value. My paper income remains flat, but the real income has shrank.
I am no longer a middle class girl, I am a working poor one, and my future looks pretty bleak. I have no extra dollar to save, I have no pension coming, and as an entrepreneur I have no other safety nets like unemployment benefits, which my ex is enjoying now.
Instead, I am working 3 times as much as I used to, and spend so much more just to get the same shrinking dollar.
I would not be writing about it, if it was just my predicament. I am writing about it, because 90% of Americans are in this shrinking boat.
Even the super-rich (like Warren Buffet or Bill Gates) have lost some dollar value thanks to real estate and stock market deflation. I am sure though that they are offsetting their rising living expense by paying less those who work for them or do business with them.
The simply rich (like Donald Trump) may actually feel much poorer because they lost just as much on stock market, real estate, Bernie Madoff and their leverage in reducing cost of business / living is not as great.
The upper middle class is now, for most part, is what middle class used to be, for the same reason.
Middle class… What middle class? Unless you are a civil servant, you would no longer fit that category. I bet your 401K keeps you awake at night.
There are so many things that went wrong for the dollar that there are not enough fingers on a hand to point them all out: derivatives, run-away credit, the cost of oil, global labor market…
Honestly, it is the global labor market that is the main culprit in stagnation of American income. But that is 10,000lbs gorilla in the room that no one is talking about. Trust me, immigration is the least of our problem. It is competition with the guys safely in their native third world countries that is doing us in. No one is talking about it on CNN, because business is happy with reduced labor costs. Except that most businesspeople don’t realize yet that spending their dollars in China or Africa shrinks consumption in America, which, inevitably, leads to their profit remaining flat too despite the reduced labor costs.
Simple economy101: wealth is produced where goods are produced.
The great minds who decided to open the labor market in 1990s must have thought as follows:
As other countries get richer, there are going to be more markets for American goods, so America would get richer too.
They did not take in consideration, however, that American production would not be able to compete with cheaper labor costs elsewhere and would shut down, impoverishing our country for the sake of China, Uganda and so on.
The only reason we did not feel the pinch right away was the inflated real estate market that was still producing local wealth. With wind taken out of real estate, we are finally facing reality.
And, since Obama Administration was not able to push through another emergency unemployment benefits bill, we soon are going to see the third world reality right here at home.
These changes cannot really be amended anymore. With the advent of the internet, Jinny of American wealth has completely left the bottle and cannot be re-captured. We are looking at the dawn of new world, where Russia (the richest country in natural resources), China (the richest country in labor resources) and India (the richest country in intellectual resources) are going to compete for new super-power title (my money is on China, since it is much more organized); the U.S., Europe, Canada, Australia and Brazil are going to be the second world, and the rest remain in the 3rd place. The jury is out on Arab countries rich with oil. If the green economy takes hold, they are going to be pushed back into the third world. They may also simply kill themselves with suicide bombers, expanded Taliban, etc.
SO, PLEASE, AMERICA, BUY AMERICAN PRODUCTS AND USE LOCAL SERVICES!
But, then, again, who can afford American products now when American dollar has shrunk so much…
Well, I am griping now, yet I know there is going to be more to gripe about a month from now… Read my previous article on that.
Posts Tagged ‘global economy’
SHRINKING DOLLARS
Posted by Ella Moss on June 25, 2010
Posted in American economy, FINANCES, economy, global economy, labor market, personal finance, predictions | Tagged: 401K, American economy, Bill Gates, Brazil, budget, business, China, deflation, dollar, Donald Trump, economy, economy solutions, Europe, expense, financial crisis, global economy, immigration, income, India, inflation, labor market, living expense, money, Obama, Obama Administration, predictions, Russia, savings, suicide bombers, supeer-power, unemployment, unemployment benefits, value, Warren Buffet, wealth, worry | 4 Comments »
COUNTDOWN TO BIG BANG
Posted by Ella Moss on May 23, 2010
In my article Financial Crisis is not over until it’s over, I’ve predicted some sort of disaster within a week of 8/1/10.
I also said that February and April of 2010 are the months where we can see the preview of what is about to happen.
Well, these months were abuzz with Greece predicament.
We also had an Iceland volcano erupting on 4/14 and paralyzing air travel all over the world, especially in Europe.
Then we had the Gulf of Mexico oil spill on 4/21.
All these financial disasters, man-made and natural are due mostly to Saturn / Uranus opposition.
Now, 7/22/10 – 8/12/10 we have the opposition of these 2 planets but with Jupiter added to the mix. Jupiter tends to exaggerate all situations greatly. Thank God, it is 2 degrees ahead of Uranus during these 20 days, which diffuses the situation somewhat.
But it also exactly squares Pluto, giving more power to Pluto’s hard blows.
Most importantly, Mars enters the mix on 7/29, acting as the trigger of events 7/30 – 8/5.
Mars, Jupiter, Saturn, Uranus and Pluto are all the hard hitters of the zodiac, and they all appear to battle each other during the outlined dates, with Mars conjoining Saturn (structure) in opposition to Jupiter and Uranus (sudden explosion), and they all square Pluto (power quake).
Now that’s in the sky. It only affects us if we have natal planetary points within their battle zone.
Unfortunately for us, Americans, we have one – it is Venus.
Whether the true birthday of the U.S. is on 7/2 or 7/4, American Venus would be hit.
Venus represents money, possessions and relationship in any horoscope, whether mundane or natal.
So as the country, we are bound to be hit. In fact, we are likely to be blindsided, thanks to Uranus, who likes to hit from behind when we least expect it.
What can we expect? Most likely, some kind of huge man-made disaster that is coming from Europe. I say so based on February and April events, that are pointing towards across the Atlantic.
We may be spared physical casualties, but are likely to be hit in the wallet with an unusual force. Discounted euro could certainly do that to us.
Of course, the planetary warfare is factual, while European disaster is my educated guess.
It can be worse. It can be a terrorist act that overshadows the WTC one.
It can even be war. Let’s not forget that the crazy North Koreans downed a South Korean ship recently.
In fact, more than a decade ago, I’ve bookmarked these dates in my ephemeris as a possible onset of another world war.
But always an optimist, I believe that mostly it is our wallets that would suffer. But since Venus also signifies relationships, our political relationships are also at great risk.
There is also total solar eclipse on July 11 that worries me, although it is only going to be visible in Southern Hemisphere and falls in 19′ of Cancer, which makes it seemingly safe for the U.S.A. But I came across an interesting article by a fellow astrologer David Crook, Total Solar Eclipse of July 11. Some of his insights make me downright scared.
In July, I am going to see my Guru, Sai Baba, who is like Jesus Christ of our times. He even brought Jesus Christ to me once in a dream that still remains more vivid than my so-called reality.
On 8/1 I am heading for the hills of Catskills (and I hope, I am not too late then).
I certainly do pray for all of us.
It would be good that whoever reads this post would join me in my prayer.
Now, for a light-hearted finish to this article, I’ve written something for devotees of Secret and Power of Attraction:
THE SONGS IN MY HEAD
In the fabric of time there is a black hole
That swallows dreams as we’re getting old
(It looks like a subway tunnel where all trains
disappear to when they are needed the most
It feels like the very familiar pain
of a body limb that’s been lost)
Once again I see dreams falling into the Void,
While stepping on pieces of broken hearts.
But the hopelessness is out of vogue
So I must hold onto sanity hard
I open my third eye at last
Looking for reasons present and past
I shout all out but silence inside
And I hear a song making grooves in my mind:
“Got to love, got to love
who you are
Got to love, got to love
where you’re at
Got to love, got to love
what you have
LEARN TO APPRECIATE”
If I could sing, I would sing right back
(not quite mad yet, but growing madder)
My other song on another track:
“But I do, I just want it better!”
Instead, I hear a strange refrain:
“Only wrong dreams are dreamt in vane.
Get away from the hole,
It’s not good for the soul.
Got to love, got to love
who you are
Got to love, got to love
where you’re at….
Posted in FINANCES, astrology, economy, enlightenment, poetry, politics, spirituality | Tagged: astrological predictions, astrology, debt crisis, diaster, economy, Europe, finances, financial crisis, financial diaster, global economy, God, Greece, gulf of mexico oil spill, guru, Icelandic volcano, India, Jesus Christ, Jupiter, Law of Attraction, man-made disaster, mars, money, North Korea, Pluto, prayer, relationships, Sai Baba, Saturn, Secret, South Korea, the U.S., Uranus, Venus, war, world | 1 Comment »
MORE ON THE GREAT FINANCIAL DISASTER OF 2010
Posted by Ella Moss on December 1, 2009
As I was drinking coffee this morning and watching the news, the potential default of Dubai Government Fund perked my ears.
“This is it”, I’ve told myself, “My predictions are beginning to manifest”.
In my October 2008 article “Financial Crisis: it’s not over until it’s over” I’ve predicted that the world will tremble in December of 2009 from some terrible financial news, as Pluto enters Capricorn and begins to wreck governmental and corporate institutions.
I also said, “By the end of November of 2009, we would begin to cry for mercy, as our economy would get completely stalled: Saturn, the planet of lack and limitations, joins Pluto, the Terminator, in the assault on the U.S. Venus, the planet of Money. It begins to squeeze it from Libra, the sign of relationships and justice. So as global trade gets restructured, we get the foul end of the deal. Saturn would limit our reach into the packets of other countries. We may face the retribution for our misadventures on foreign soil and/ or for amassing huge deficit (read “debt to other countries”).
But I was wrong: it’s not our country’s deficit that is going to do us in, but other countries’ default on their debt obligations.
Since I am just an astrologer and not a psychic, I got timing and institutions involved right, but I could not foresee the actual turn of events. Who could?
Dubai has been swimming in gold, its coffers filled to the brim, it seemed, by oil it was sitting on. It was building the new world wonders and aimed at becoming the new world financial center. It appeared to be the richest country in the Middle East, and its only foreseen threat was depletion of oil reserves at some point of the far away future.
So a whole lot of pension and hedge funds from all kind of countries invested in it, thinking it was almost risk-free.
Think about it:
The first part of the world financial crisis that ruptured in the fall of 2008 was brought in by losses of private investors. As bad as it was, it was contained by huge governmental bail-outs by governments of the developed world.
This strategy indebted governments of the richest countries but defrosted financial markets.
Now comes the second part (i.e. the other shoe drops):
Governments begin defaulting.
Private financial institutions are already seriously ailing, and are held alive by financial transfusions by the governments. Now the governments need donors…AND WHO COULD RESCUE THEM??…..
Dubai is just a beginning of the falling dominoes. If it defaults, the legions of pension and hedge funds that invested in it are going to collapse, and THERE IS GOING TO BE NO FINANCIAL DONOR TO SAVE THEM.
This means that
1) many retirees all over the world are going to be left without pensions, and governments, already stretched to the max, would have to extend more social services to them and bleed more money.
2)Financial institutions are going to freeze once again, as investors lose a few more billions
AND WHO IS GOING TO BAIL THEM OUT THIS TIME? WHERE NEW MONEY IS GOING TO COME FROM?
The developed world is going to lose its footing and fall onto the developing world, crushing it.
3)The developing world (save for China, Russia and India) is going to default too. AND WHO IS GOING TO BAIL THEM OUT THIS TIME? WHERE NEW MONEY IS GOING TO COME FROM?
4) Unemployment and riots are going to shoot up. Would Obama be able to sign 3 yrs unemployment benefits? Where the U.S. money is going to come from?
Now the question is should I get my savings out of the bank before the summer of 2010 (that is when the world crushes)? I should take a good look at a horary chart on that one…
The good news is that the timing of events suggests that the actual birth date of the U.S. is actually July 2. Now we know.
Posted in astrology, economy, politics | Tagged: 2010, astrological forecast, bail out, developed world, developing world, Dubai, economy, financial crisis, financial institutions, global economy, government, hedge funds, pension funds, Pluto in Capricorn, predictions, predictions 2010, Saturn in Libra, summer of 2010, unemployment | 6 Comments »
New Economy, or Buy American, Stupid!
Posted by Ella Moss on February 20, 2009
So, the new stimulus package is passed, hopes are up, markets are down, and recession deepens. Everyone is blaming the housing market, unscrupulous bankers and inept previous administration.
But very few seem to understand the true roots of our woes, and how deep our economic problems go.
Believe me, the trillion dollar stimulus is but a bandaid on a very deep wound!
Everyone is stuck with the 20th century economic model:
an entrepreneur discovers a need->manufactures solution->gets rich->creates demands->someone else fulfills those demands->gets rich->creates more demands->those who supply solutions get rich too->created jobs create more jobs->society gets richer and richer
This is the 21st century global economics model:
manufacturers/suppliers find cheaper workforce in a poor country->enrich that country->the workforce gets more expensive->the suppliers go to another cheaper country->previous producing countries get poorer, their workforce immigrates to a new labor market->wages stagnate or get lower->more labor markets get poorer->no one can afford the supplies anymore->manufacturers go bust->everyone gets even poorer.
If you don’t believe me, here’s a news bit on Ireland. Ireland was in great demand as a labor market, because people spoke English, were educated, yet asked for much lower wages than UK or American workers. The labor market there was so hot, that Polish and other poorer EU brethren immigrated to Ireland.
But the workers grew too expensive in Ireland as economy there heated up, so the companies left for cheaper labor markets like Poland. Now Irish workers immigrate to Poland. But they no longer get the same wages. Living expenses are cheaper in Poland for now, so it makes some sense. Once Polish economy booms, however, and living expense there goes, accordingly, up, Poland would face the same economic bust, as now does Ireland.
India was also a popular labor market. But they started asking for too much money, so China became a place to be for manufacturers.
Lately, however, the “smart” manufacturers have been migrating to Africa.
Where does it leave the U.S. – the original place of labor migration?
I found an article in one of the New York’s free newspapers (Metro is it?) that the U.S. stills manufactures 65% of its products domestically (down from the 20th century’s 80%).
But it does not say, that the domestic wages went up. Because for the past 7 – 8 years they have not. Domestic salaries have not increased either. In fact, many went down. Because our labor force now competes for wages with Irish, Polish, Indian, Chinese, Mexican and other labor forces of the world.
The only market that saw increase in the U.S. in the past 8 years was the housing market, as speculators (flippers, real estate and mortgage brokers) kept pushing the prices up to the point of unaffordability by the impoverished middle class (the domestic labor force).
The feeling of prosperity that bubble has created had no base in reality. That feeling was based on the ease of credit (future income of financial sector ->future prosperity), which was given on a funny assumption that housing prices would continue to rise as wages have historically done so, affording better prices.
But our wages could no longer support our consumption on easy credit, hence prices and credit crunch.
No matter where our income was coming from, its sources were disappearing or getting smaller at best.
Not only manufacturing was leaving America, services were too.
Web design, translations, document processing, customer service – all were becoming outsourced. When was the last time you have heard a customer service representative on the other end of the phone that did not speak with an Indian accent?
People in this country that specialized in the services that were now easily outsourced could no longer ask for wage increase, if they were to be kept employed.
In the 21st century, the labor market is global. That means, the wages for the same services performed would eventually average out. If a Russian translator in the U.S. asks now for $.14/word, and a Russian translator in Siberia asks now for $.05/wd for the same job, eventually they will all go down to $.05/wd. If a worker at a Chrysler plant in Detroit asks for $35/hr, and a worker at a Chrysler plant in Mexico asks for $5/hr, eventually they will all ask for $5/hr – because it is natural for any company to seek out a cheaper labor.
Since the impoverished global workforce is not going to be able to afford $30,000 cars and $300,000 homes, those prices will go down too -unless they are artificially held high by governments’ bailouts. But bailouts cannot continue indefinitely. So the prices will continue to deflate in accordance with deflated average incomes. Middle class is going to disappear (it may take a few decades), unless the governments would wake up and set up some protection.
No, not trade protection – that is passe. It is the labor markets that must be protected, if we don’t want to go back to the economy we used to have throughout 10th – 19th centuries – the economy of a few very rich, and the rest being very poor indeed.
But I am not stupid enough to expect our government (or any other for that matter) to step in with labor force protection. Besides, the ease and cheapness of global communication and travel would create serious obstacles to any attempt to create such protection.
The only thing that may protect our domestic labor force is the consumer movement. Just as our demand for green products has eventually created green industries, our demand for products made in America may protect domestic work force..to some extent.
Incidently, when was the last time you saw something made in America in a store?
Posted in Uncategorized | Tagged: credit crunch, economy, global economy, global work force, made in America, payroll tax, predictions, recession, trickle-down economics, unemployment | 7 Comments »

