"The unedited musings of a recovering madman"

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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