If you've been paying any attention, you are aware many mortgage banks are in a bit of a tight spot. Defaults are through the roof, the money just is not flowing back into the coffers as expected. Lots of refinancing and speculation on house values has turned this equity into vapor$.
The government is bailing out these companies and injecting liquidity. Such are the nice golden parachutes made for bankers whose greed and business practices are questionable. And yet without the government assistance surely more people would end up hurting.
It's tough out there.
I wish I had all the answers for folks who are struggling, but I do not.
Growing up, I was taught loyalty to a company was a positive trait. Now folks use companies like stepping stones and each job is viewed as a stair step to a higher paying job, likely with another firm.
This is swell and fine as far as it goes, but eventually it means companies are filled to the brim with opportunists who are just waiting for their chance to get ahead. It's hard to run a tight ship and get much accomplished when your crew is eyeing other passing vessels to see if their sails are larger and the crow's nest is higher.
This opportunism and self-interest over all, leads to corporate decay. Who can you trust? How do you know your VP won't go work for your competition next year? How does a troubled company's board know if the CEO they import is just getting ready to loot the remaining company equity on a short-term stock price building spree and bail before the stock tumbles again?
Like I said, it's tough out there.
Generating wealth is the key to increasing the global economy. But the wealth can't be vapor$, such as inflated stock prices or adjustments to the market that simply shift existing wealth.
Folks like George Soros live to play Robin Hood and shift western wealth and equity to 3rd world nations - nations where he has his special connections set up with the local governments and he becomes a de facto Prime Minister. Does this help the world? Not at all. It doesn't generate new wealth! It's an escape mechanism for those who get very rich and then feel guilty about it.
New products, new technologies and new ideas are where wealth is generated and where jobs are made. It is important to realize that even the Chinese labor and companies painting toys with leaded paint and working in horrible conditions - are still earning more than they were before the US firms sent manufacturing jobs overseas.
Many, and actually most of these employees, are happy they have a job at all. Many farmers who earned next to nothing and lived a week or two away from starvation are actually much better off financially than they used to be.
It will be up to China to enact laws that prevent their masses from being exploited. However, like the greedy mortgage companies, they make hay when the sun shines and because of a certain insensitivity developed in a nation with well over a billion mouths to feed, a Chinese can exploit his fellow Chinese and not blink an eye.
When Chinese labor wages increase enough so as to make manufacturing there, with the added expenses of shipping the goods here, on par with using Mexican labor, we will see Mexico's economy boom. As China gets richer, more folks have cars and expect larger salaries - we will see China's wages grow slowly. For the next twenty years or so they will still be some of the cheapest labor on Earth.
It's not a pretty picture - all this exploitation, selfishness and corporate warfare. Yet, I shouldn't delude any readers that today is much worse than say 1910, when the robber barons and the monopolies controlled whole markets and when child labor was considered acceptable cheap labor.
Everything comes with a repercussion. The child labor laws we have here and the minimum wage backfired somewhat on the US worker. When a company can't afford to pay minimum US wage - they go overseas. So even the paltry sums they pay these folks, is shipped out of the US economy and as a result - US wealth declines. US buying power is diminished.
Liberals often wonder why the minimum wage shouldn't be increased to enrich the working man. The reality is the last minimum wage hike just spiked the demand for illegal Mexican labor and has led to the enormous exodus of overseas manufacturing jobs.
Even cartoons, for networks like Nickelodeon are drawn with Chinese labor after model sheets are sent overseas (ever wonder why cartoon art looks so lame these days?) and used for Chinese artists to imitate.
Would we be better off scrapping the minimum wage? No. Would we be better off revising it? Yes.
Here's my proposal - pay attention legislators! - add a provision that for folks with less than 2 years labor experience - they can be paid less than the minimum wage.
Brilliant, isn't it?
This way kids in high school, folks with no experience what so ever can be employed at less than minimum wage!
What's the benefit? Bingo...manufacturing jobs come back from overseas. Folks who would not qualify for a normal job find employment for 2 years and build up their resume and skills.
It allows for a legal "slave labor class" here in the USA - however limited to just two years time, completely gets rid of the need for illegal Mexican labor and keeps billions of dollars here in America - what's not to like?
Sure, the concern is that companies will never hire ANYONE at minimum wage or over again. Bingo...another provision! Companies may only have a maximum of let's say 8% of their workforce working under minimum wage.
See how that works? Companies could now stop using illegal or overseas labor and still cut manufacturing costs to make American labor competitive again.
Sure lots of folks won't want to work at below minimum wage, but there are A LOT of young folks, new to the job market, who would - especially if it was only for two years.
Well for now, that's it. Think about the pros and cons. If US corporations have no alternatives almost ALL manufacturing will be done overseas and this is not good for our economy.