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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: Lane3 who wrote (59627)	4/16/2008 6:42:10 PM
From: Katelew	Read Replies (2) \| Respond to of 542970

My intent was not at all to mock you....or maybe you were teasing. As for rising wages, the benefits are obvious. If you get a raise, don't you either spend it at the mall to the benefit of all the storeowners you shopped with? Or maybe you save it, which doesn't benefit the economy in the shortrun but will at retirement when you have more savings to spend. When you get a raise, don't you pay more taxes to the government? When you shop at the mall, don't those storeowners then pay more to the state in sales taxes? Rising wages create the situation of a 'rising tide that lifts all boats' type economy. Flat wages are OK as long as prices remain the same. OK in the sense that the average person may not be getting ahead, but at least they aren't falling behind. Right now things are falling into place that leaving me feeling worried and pessimistic about the country going forward......and I don't see where the improvement will come from. Unlike Europe whose real estate values are not contracting, we're experiencing something unprecedented since the Depression. We have falling asset values....real estate and financial assets.....along with inflating prices of basic essentials such as food and energy. And wages are flat or falling. In the 70s inflation, wages were rising and the jobs markets were strong. The Fed induced a credit-based recession and unions began to lose their bargaining power in the early 80s, but there was still a stronger underlying wage and job climate that pulled the economy out of the recession. What we have now is a consumer led recession, not a credit based recession, and it is coming after a period of no wage growth. I don't see how this is resolved other than a lengthy period of consumer saving. Wage growth would be better but there's no impetus for it. Companies use their excess cash flows to buy back stock or to buy equipment that replaces workers, not to raise salaries......except at the top, of course. So this is why I said 'we should be so lucky in this country as to have rising wages'.