Does the "R" Word Depress You?

The basic “Economics for Dummies” definition of a recession is two consecutive quarters in which the value of the Gross National Product does not grow. But what that REALLY defines is a “Corporate Recession”, and it’s occurrence depends very much on the spending habits of the consumers who pay for the goods and services the corporations provide for them to buy.

Let’s look at another kind of recession, one that's never talked about: a CONSUMER recession. If we use the same parameters as we used in the Corporate Recession then a Consumer Recession would begin when two consecutive quarters pass in which the value of our own individual Gross PERSONAL Product does not grow.

Let’s begin with wages. Wages are usually measured in dollars. But since we’re not talking about “income” we received, but the product we can buy with that income, then we have to measure the value of the products (and services) we can purchase with the dollars we have “produced” by our work and investing.

For example, we may be buying more gasoline and food than ever before. But that’s only if we measure those purchases in dollars. When you look at the AMOUNT of gasoline and the amount of the food we use, that can go down even as our expenditures in dollars goes up. In short, our cosumption in dollars could increase at the same time the “personal product” we realize is decreasing.

Managers though, don’t speak just about “wages”, usually they like to talk about “wages and benefits”, or “a wage and benefits package”. Can we compare the value of our wages AND benefits over the years? First, we can show that the average American's wages, once they are adjusted for inflation have actually decreased slightly since about 1970.

Now, what about those benefits? Benefits traditionally included retirement and medical care. These have decreased significantly over the past several years. Meanwhile the cost to the individual to buy or use any of these “benefit packagess” (i.e. medical insurance and retirement) on his or her own has soared. That means our actual wage and benefit package has decreased even before we compare what they will "produce" for us.

Another “benefit” consumers have received are various government programs which have provided money or services of value to the individual. These, of course, have also diminished over the past 30 years or so, and we find more and more programs being “privatized”, which means that the cost of those programs will always continue to rise while the services and products provided will always decrease.

Now, against the “income” of our total wages, benefits and governmental services, we subtract the “costs” we incure in procuring these items. these costs include purchases, debt and taxes. Let’s look at each of these.

Cost of purchases has gone up – really has to – that’s the basis for the American GNP, remember? Then there are the twin demons of inflation and cost of living adjustments (COLA). This is like the ancient battle between Good and Evil. In this battle, inflation always wins. Ever notice how the COLA is always called a “raise”, as if the recipients were being rewarded with “more” product? Actually, the COLA increase is always late, and always less than the increase of inflation. Therefore the COLA is always a loss.

Then there is the matter of debt, which does represent a product, however it always results in paying more dollars to secure a good or service that the original cost.

Lastly (for this discussion), there is the matter of quality. Do the things we buy last as long as they used to? Do they become obsolete quicker? Probably depends on what you buy, but if you find yourself buying more products to achieve the same level of satisfaction you used to get with fewer purchases, then you have encountered another decrease in the value of the product you buy with your income.

And what about "Imputed Taxes" - those contributions we have to make to lobbyist groups to represent us in congress. These keep going up, too. Our representatives are “supposed” to represent us. We “shouldn’t” have to hire “congressional mercenaries” to represent us to our own represenatives. But here is another place we are in competition with corporations. They spend much more money than we can to influence our representatives, and they use the money we have paid them to buy the goods and services they produce for us that we buy. Therefore, their payment to their lobbyists are also part of their expense of “doing business” therefore we pay that their lobbyist's costs as well as our own.

Well, if you figure all this out, and agree with me, then it is obvious that we are IN and HAVE been in a recession for some time. And if you look into these figures closely, they you may WELL feel a depression coming on.

True Fact.

So ~ the Clinton camp says that the only reason Obama is tied with Hillary is because he is a black male, right? I think they ARE right! My take on it is that if Obama were a white male, he would be WAY ahead.

And to think on the matter a bit longer, if Clinton were a white male, she would have been dumped along with Biden, Dodd, Richardson and the others a long, long time ago. Also, if her name wasn't Bill Clinton's Wife, she would have had to buy all the attention she has been given.