Losers Magazine (tm) Article No. 5 (10/5/95) by Carl E. Person

What the Middle Class Can Expect from the Economy

The reports from the media are bullish, predictably, and they are not wrong. Their primary readers have done well and will continue to do well, even as the economy deteriorates for most others. Thus, Business Week, in its cover story for October 9, 1995 , Productivity to the Rescue,, predicts that higher living standards seem inevitable, which is typical of the major media, which misleads ordinary persons and most voters into believing that things will work out ok, without any signif icant changes -- just hold on, things will work out.

But we have empirical evidence to the contrary. We see that the standard of living for many persons has decline over the past 20 years or so, and that many millions of high-paying jobs have been lost with no replacement jobs in sight.

Business Week is correct that the economy will get better for the majority of its readers, the most successful businesses and business persons in the United States. We can see that from the stock market prices, which always seem to be hitting allt ime highs. But we don't see any of that wealth going to employees. We see instead that employees are getting fired and that increased profits are not being shared with the employees below the top.

What we have to conclude is that publications such as Business Week and The Wall Street Journal do not speak for the vast majority of Americans, and they must obtain their information from some other source, which is the role which Losers Ma gazine is undertaking.

What, then, can the vast majority of Americans expect from the economy, if no significant changes come about?

First of all, not everyone will be adversely affected. Government workers and fulltime employees of large corporations and organizations will generally be better off than employees of small business, and small businesspersons.

Older persons, underemployeds, under-educated persons, minorities, non-skilled persons, employees of small business and the self-employed will continue to obtain less income, for more work, and be less able to pay their expenses, and will thereby suffer a significant additional decline in their standard of living, especially when viewed in relation to the persons who will benefit from any upswing in the economy.

Drug use will increase, which for some persons is better than doing nothing; and as a result violent crime and robberies will increase, together with violent crimes caused by more and more persons becoming disaffected from the economy, through loss of job , family, self-respect and opportunity.

More violence will take place in the form of riots as a way for poor or minorities to demonstrate their recognition that something is very wrong, even though they can't articulate what the real wrongs happen to be.

Juries can be expected to be more anti-government when it comes to convicting minorities of most crimes, but probably not as to terrorism or sedition.

The cost to the economy of not putting the necessary changes into effect will far outweigh the cost of the changes, but the major corporations don't pay for these costs anyway, by reason of excessive tax breaks, allocations of taxable income to other coun tries, excessive deductions which can't be counteracted by the taxing authorities, among other reasons.

An increasing alienation from government and big business will take place among the persons being injured, who will pull back on their purchases (not only because they no longer have the money to purchase, but in order to save money for the economic probl ems arising in the future).

Also, families or units of persons living under a common roof or in a local area will undertake to perform more activities on an exchange, barter or communal basis such as to provide day care, growing of food or use of purchasing cooperatives, to name sev eral things, to reduce the need for money which they don't have.

In addition, individuals or families will leave the high-cost, high-problem cities to go to suburban or country areas where living is safer and cheaper, or even to a foreign country. I investigated the cost of living along the Mediterranean Coast in Spai n several months ago, and determined that a person could purchase a decent condo for about $20,000 and live for about $500 per month. A friend of mine has moved to Thailand because the cost is only about $300/month. Compare this to living in New York Ci ty with $150-$300 per month for parking; and $1,500-$2,000 per month for rent; and $10,000 per year or more for necessary private schooling.

The high costs of living in cities like New York can't be afforded by most persons who are not participants in the growing economy, and the non-participants are starting to look elsewhere for different living arrangements, and a lower economic status. Ma ny persons find the reduced economic status a blessing in disquise, giving them more time to enjoy their family and life, even though such newly-discovered pleasures are being forced upon many of them.

What is happening, it seems, is that the deterioration of the economy is going to hurt everyone, sooner or later. The persons being hurt now are necessarily going to reduce their participation as consumers and purchasers in the reported economy (meaning in the transactions which are included in the gross domestic product and in stock market prices), which will cause the economy to decline in due course for the present (excessive) beneficiaries of the economy.

Persons without jobs won't buy new cars, and will learn how to fix their own cars, to save money they can't afford to spend. Vacations will be less expensive, involving less air travel and fewer motels and restaurants. Expensive clothing won't be needed . College and university educations are proving too expensive for many of the jobs which are being offered to college grads, so there is going to be a reduction in college attendance, and a resulting demise of numerous colleges and universities in the Un ited States.

These things are happening already, but no one takes notice. The scramble for survival often hides the unpleasant facts until it is too late. Legislators are more concerned with obtaining contributions from the participants in the globalized economy tha n they are in trying to make the system work for the persons who can't afford to make political contributions and have no association lobbying for them with offers of campaign funding.

So, campaign financing reform will have to be part of the change, but can be expected only when enough voters demand change. Voter are realizing more and more that there is no significant difference between the two major political parties, and that a vot e for either party is a vote for the status quo and continued deterioration of the economy from the average voter's standpoint.

Meaningful political reform only comes about when voters understand the issues. Part of the current political process is to divide voters into non-economic camps such as pro or anti abortion, so that no vote is conducted on the meaningful economic issues . When voters finally understand the economic issues involved, and vote accordingly, most of the current legislators will be swept out of office and conceivably some meaningful reform could take place.

Meanwhile, until this occurs, the average person who is suffering from the new economy will have to become more reliant on him/herself, by trying to spot a niche in the economy to fill.

Websites such as Lawmall (tm) offer great opportunities for individuals, individually or through groups, to offer their services on reasonable terms to persons in need of such services, at prices which are far below the prevailing prices paid by major cor porations for the same services.

A downsized, underemployed, unemployed or unprofitable business owner should make use of internet, including e-mail and the web, to create business opportunities for themselves. For example, a person wishing to earn money by painting houses could create a web site, invite house painters from other cities to join the site, and offer relevant information to the public such as price, colors, start and completion times, fax and telephone numbers, how to obtain estimates and the like. As part of the marketin g effort, the house painter could hire unemployed teenagers to distribute flyers for $2 per hour plus a commission on each sale (assuming that the teenager can be retained lawfully as an independent contractor).

Another idea is to buy a used post office truck at auction for about $100 or so; put in various tools and equipment, including a cellular telephone; and hire teenagers to circulate flyers to homeowners in a specific area (perhaps a 10 or 20 block area) of fering to do odd jobs around or in the home, for $20 or $25 per hour. If a person tries hard, is honest, and has reasonable competence, this type of work would soon blossom into a successful 1-person business, making $1,000 per week, mostly cash.

Anyway, you get the idea. Persons who do not presently participate in the economy do have the opportunity to participate, but have to exercise initiative which often is not developed by a bureaucratic employee of government, a non-profit institution or b ig business.

If you have any questions about what to do, please send me a fax (212-307-0247) or an e-mail message (carlpers@ix.netcom.com). Please be specific about your problem and your question, which will enable me to provide a more meaningful discussion for you.

Copyright © 1995 by Carl E. Person. Permission is given for non-commercial users to send a copy of the data processing file for this work by electronic means to a specific individual for his or her own use, and then only if the entire file is sent, including this copyright notice, but no permission is given for anyone to copy or transmit this file for or to any person for public viewing or downloading. It is intended by the author of this work that the work shall be made available in electronic fo rm only through LawMall (tm).