May 27 2016

Class of Underemployed: Nearly 50 percent of recent college graduates are working in jobs where no college degree is required.

We don’t send our young into the wilderness for a vision quest as a rite of passage.  There are few things in modern society that signify a transition into adulthood.  Going to college is one of them.  And in debt addicted America, it is no surprise that for many, college debt is the first debt they will take on.  Getting a college education is supposed to give someone a well rounded view of the world and a potential skill set.  Some argue that college is not about vocational training.  That to some degree is true but when students are going into $50,000 or $100,000 of student debt, then what is this modern day life quest really teaching and why is the price tag so incredibly high?  As college graduation season comes into full bloom, many are left with the prospect of having no job lined up.  It is also startling to see how many recent college graduates are working in jobs that really don’t require a college degree (so clearly the vocational piece doesn’t matter here).

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May 22 2016

Putting it on plastic again – Record number of credit cards issued in 2015 surging 90 percent from 2009. 60 million credit cards issued last year alone.

We love credit cards as much as we hate paying bills.  As a nation we have an addiction to instant gratification.  In the not so distant past, Americans actually had to save money before making a purchase. Seeing that many Americans have nothing in their pockets except lint and cell phones with hefty monthly payments, this isn’t a surprised.  You fire up your phone and open up Facebook.  You see all of your friends posting great photos of eating out at fancy restaurants and pay day is a few days away.  What to do?  Just go out and load it up on the credit card!  Let us not forget that the financial meltdown came about because of economies which are made up of people spending way beyond their means.  After the crisis, the number of credit cards issued collapsed.  Today we are at a peak with 60 million credit cards being issued in 2015 alone.  Happy credit days are here again!

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May 16 2016

Once upon a time, there was a middle class: This election year will determine whether the middle class falls into obscurity.

In the not too distant past the United States had a vibrant middle class.  Prosperity for most families was the rule rather than the exception.  This didn’t happen by accident or some odd twist of luck.  It happened because as a country we setup a foundation that valued a robust middle class.  The Great Depression had taught us some profound economic lessons and humility.  But like a car that is neglected and falls into disrepair, the middle class is now a minority group in this country.  We tend to romanticize the past but in this case there is some truth to this view of history.  Going to college is now putting millions of Americans into incredible levels of debt.  Buying a home is moving further out of arms reach for most working families.  And the notion of a secure retirement is turning out to be more of a fairy tale than reality.  Once upon a time, the U.S. had a majority living in the middle class.

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May 8 2016

34% of all Americans financially support the rest of the country – 112 million private sector workers support 211 million people.

The latest employment report was lackluster.  The math on the employment numbers has concealed a deeper problem in the economy.  Many Americans are struggling and the middle class continues to lose ground.  The most startling figure coming out was that 562,000 people dropped out of the labor force.  While there is a bit more information on those “not in the labor force” the press is still largely quite on this issue.  You can frame the topic in a more poignant way by saying that 34 percent of all Americans financially support the rest of the country.  With an aging population and record levels of debt, this might be a problem.

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May 4 2016

New banking normal where lending $2 increases GDP by $1: US bank credit up 44 percent since 2008 while GDP up 21 percent.

Remember a time when people used to be cautious when it came to taking on debt?  Probably vaguely since the entire U.S. economic system is built on “gold” and “platinum” credit cards being shelled out to people that can’t afford an ounce of either.  In the mail I’m receiving overwhelming offers for credit cards and personal loans.  The last time credit was flowing this easily was in 2005 and 2006.  I’m not sure if people realize that the Great Recession was caused by excessive debt.  Too much leverage.  So it should be sobering to hear that since 2008 bank credit is up 44 percent while GDP is up 21 percent.  What is basically happening is that for every $2 in lending GDP is moving up by $1.  In other words, we are building a house of cards once again.

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Apr 29 2016

The Two Income Trap has only gotten worse: America has become a dual-income nation since one income isn’t enough to maintain a household.

America has become a nation where households depend on multiple streams of income just to get by.  Many people think that having two incomes is a luxury when in most cases, you need two incomes just to get by and keep up with the rising cost of living.  This is reflected in the two income trap. Take for example a couple that works and makes the median household income of $52,000.  In many cases if the couple has a child, daycare costs are needed and these can run exceptionally high. Healthcare costs are also incredibly high and have grown unbelievably fast over the last two decades.  This recent recession could have been called a Mancession since most of the jobs lost went to men.  America is a nation of dual-income households because people are too broke to get by on one income.  The current state of the economy hasn’t helped much in supporting economic growth for working families.

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Apr 24 2016

Crony capitalism and the rigged system: 0.01% of households gave 33% of money raised by political parties and Congressmen. Most members of Congress are millionaires.

The system is rigged.  Like a carnival game, the odds are against you.  This isn’t something that started this year or last, but has been going on for many decades.  As long as the media was controlled in a few hands the propaganda kept most of the public in the dark.  People now have the ability to access information from wherever they want.  And that is why in 2016 you have two party outsiders doing so well.  Typically, party insiders excel and do well if they follow the party line.  The middle class is now a minority in the United States and people are scratching their heads wondering why.  That issue is complex but one thing that isn’t complex is how Congress is bought.  0.01% of households gave a stunning 33% of money raised by political parties and Congressmen.  It should also not be a surprise that half of Congress is in the millionaire club.  In other words, the system does not represent you.

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