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Old 02-07-2009, 05:57 PM   #1
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What are the REAL reasons why Americans have been losing their jobs?

Hey everyone. I have a few friends who were recently laid off from a pharmaceutical company due to an acquisition. They join the millions of Americans who are out of work during these tough times. So I felt compelled to initiate this kind of discussion.

Unfortunately, I’m not educated a whole lot regarding the US economic system. All the economy-related threads on this forum just leave me with a question mark. I do know that Wall Street had a big meltdown last year with the financial collapse of a bunch of banks. And these banks fell because people couldn’t pay their mortgages. As a result of these banks failing, companies can’t get the funds to support their businesses. And this was followed by a massive rash of layoffs. And unemployed people can’t afford to spend, so retail outlets like Circuit City met their demise.

I also understand that companies tend to participate in such activities as merging, downsizing, and “offshoring.”

However, that’s all I know.

But everything can be traced to a beginning. A trend in job losses doesn’t just happen. One thing leads to another. There are cause-and-effect relationships obviously at work.

Can someone piece all of this together? How do banks, government, and business practices figure into the equation? What are the origins of this rolling snowball of job losses in the first place? Where did it all start to go wrong? Is there a timeline?

Thanks for your help, guys. I apologize if I seem so ignorant.

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Old 02-07-2009, 06:13 PM   #2
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Credit crunches are always followed by recessions, usually, unfortunately, pretty deep ones. This is no exception.

Last Autumn, the interbanking lending systems broke down almost completely. Banks were not lending to each other at all as they did not trust each others balance sheets. This is a credit crunch.

Some economists I recommend:
Nouriel Roubini, Naseem Nicholas Taleb, Peter Thiel. These predicted more or less what has happened.

Some sources I do not recommend: CSNBC, Fox, most of the Murdoch press and most of the mainstream media.

Mainstream media sources I do recommend: Bloomberg and the Financial Times. Ambrose Pritchard-Evans and Jeff Randall of the Daily Telegraph.

Also, I liked this post in another thread:-

Originally Posted by AliEnvy
Basically you're being robbed blind in broad daylight so the more confused people are about it the easier it is to do. It's not a conspiracy of evil people deliberately inflicting harm. But the in the end the result is the same.

A shitstorm of financial irresponsibility, greed and ignorance by just about everyone, everywhere at all levels is raining toxic fallout and those with the power to save themselves are doing so. It remains to be seen how bad it will be for everyone else.

Getting out of the mess will require the US to increase productive capacity in the global economy. Right now individuals, states and many western countries (largest being US) consume more than they produce and are going bankrupt.

We have to produce more of what the rest of the world wants to buy. We've essentially moved away from manufacture of durable goods and have moved towards innovative technology that allow us to do more with less in the colour and flavour of our choice. Focus, hard work, retraining and significant breakthroughs on this front will be what drives our economy back to growth.

In the meantime we'll build roads and bridges buy less useless stuff and try to avoid WWIII.

Finally, a quote from (I think) 2006:

"We are living in a world distorted by the biggest financial bubble ever seen.....there has to be a deleveraging of the world's financial system"-
- Peter Thiel of Clarium Capital, (as quoted in "Inside the House of Money": A Book with 13 Interviews with Global Macro Hedge Fund Managers, by Steve Drobny.)

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Old 02-07-2009, 06:13 PM   #3
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At a guess I'd say Americans (and others) have been losing their jobs because a state of near paralysis has been reached with regard to spending in general. And that has occured because the issue of credit has sort of frozen up. Which affects any business needing a loan or ongoing financing to do their thing.

And that happened because of something in the sub prime mortgage market (and I'm not even sure if that was because 'people' couldn't pay their mortgages, so much as that the organisations which buy and sell vast aglomerated debts just sort of bit off more shit than they could swallow).

The main thing now is to just sit put and pray, because as Purpleoscar reminds us, the New Deal may have in fact caused the Great Depression. What we need now is a new Hoover!!!
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Old 02-07-2009, 06:19 PM   #4
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Originally Posted by Kieran McConville View Post
The main thing now is to just sit put and pray, because as Purpleoscar reminds us, the New Deal may have in fact caused the Great Depression. What we need now is a new Hoover!!!
We need a new Juan Peron!!! At least he made the trains run on time, JAWOHL!!!
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Old 02-07-2009, 06:50 PM   #5
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The bailout did NO good for workers. Remember when they forced it through they said there'd be distastrous results in the economy if it didn't pass? Well look, more banks have failed, more people lose their house and more lose their jobs AFTER the bailout! Just as I suspected, only the rich will profit from it and everyone else will be worse off and then we have to carry the debt for it! It's long past time to teach the rich a lesson all the poor had to learn the hard way and get called losers for- stop playing with fake money, stop being irresponsible. That's the only cure, not more bailouts. Let the banks and corporations suffer, it's the only way they'll ever learn. It happens to real folks all the time. I don't believe helping them helps the workers. The recent job losses prove that. Let them fail, let the shit fall where it may. It won't be on my head, I'm already at rock bottom. Let them see how it feels.
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Old 02-07-2009, 08:11 PM   #6
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The faceless rich are just looking after their own asses.
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Old 02-07-2009, 08:13 PM   #7
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I know auto workers were laid off, because of less demand for new cars. The building of new homes has come to a halt. But, don't feel bad for not completely understanding, what is going on. Our politicians are talking in circles. I am just as confused as you.

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