April 20, 2020
“We should be very worried…”
… says Atif Mian, Princeton economics professor and author of influential House of Debt…
“…We are talking about a level of debt that would certainly be unprecedented in modern history or in history, period…”
Exactly what Dr. Mian thinks we are tipping into isn’t clear, but other things are easy to see…
…Our financial system rewards debt…
We get tax breaks for mortgage debt, business debt and finance debt. The national debt has rocketed to more than the entire annual GDP – the total of everything bought and sold each year.
But when hard times come look at what happens:
Capri Holdings (Michael Kors, Versace, Jimmy Choo)
Signet (Kay Jewelers, Zales, Jared, Piercing Pagoda)
Tapestry (Coach, Kate Spade, Stuart Weitzman)
People working at those outlets a few weeks ago are now unemployed!
And there will be NO jobs for them, or anyone else in the near future. For the last two decades there have not been enough new jobs created to employ the 100,000 to 150,000 people who enter the labor market EVERY MONTH. More people have left the labor market than ever before because there are not enough jobs to go around.
This is why the gig economy has grown so fast after the 2008 collapse. The 22 million now out of work, (with millions more likely to follow), have no place to turn except gig jobs.
In a New York Times/SurveyMonkey poll done two weeks ago 60% of respondents expect high unemployment or a depression over the next five years.
Too bad it took COVID-19 and an economic disaster to give us something to agree upon.
And, as if things weren’t already enough of a bummer…
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