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  • A Broken Culture, Broke the Economy

    The job you don’t have now, will be the same job you won’t have tomorrow.

    The American economy is broken, not because of manufacturing or innovation, because of consumers, and if the country is to get more properly aligned with what it can and should be doing, the economy should never be what it was in the 1980’s and 1990’s.

    Huh.

    There’s a one-word answer for the cause of the broken American consumer economy: credit.

    The real problem with the roaring economy Americans got used to in the 1980’s and 1990’s: was that it really didn’t exist. Yes, it was there, but it was not real. Americans were not only buying things they could not afford: they were purchasing items that they would never be able to payback – for many, items that they would never be able to payback in their lifetimes.

    So America is in need of a new economy: one where the federal government and consumers exhibit more discipline, pragmatism and performance with their outlays. The economy will need to change, because people are now in deep debt, or they now know they are near the precipice – one layoff, sickness or divorce away from catastrophe, which is changing consumer behavior.

    Americans have got the message: they are buying less and learning to live with less: and this is the new normal, especially if the United States wants to get its financial house in order. The former path was unsustainable, and there were connected corollaries that made it worse. For instance, when Americans were buying “too much house” for their own good, businesses didn’t say, “hey, let’s fix this,” no, they created more products – quixotic products, because they didn’t care that it was no-money money – they just cared that the money, wherever it came from – however it got there – ended up with them.

    Now that consumers are in the real world, the world that expects you to pay your obligations that they’d abdicated: Americans are now deciding  to have less obligations – so consumer indexes for goods and services, might never reach those lofty – quite startling numbers of the 1980’s and 1990’s ever again: they shouldn’t have been there in the first place.

    So let’s get crystal clear: if sales for appliances, for automobiles, for houses and for food etc are not going to go up to the levels when Americans used their credit indiscriminately, carelessly – then companies will definitely sell less goods, at least in the United States anyway. Why is that important? Jobs.

    If sales are not going to dramatically increase, and technology is becoming more of a factor in determining, which jobs are necessarily held by people, and which are not, then companies won’t be compelled to hire: they might even reduce workforce more, once they settle on the notion that the demand they have now, is the all the demand that they will receive. Without strong and growing demand, there’s no need to hire anyone: without the need to hire – current unemployment numbers won’t be an anomaly – they will be the new normal.

    The job you don’t have now, will still be the same job you won’t have tomorrow.

    In his New York Times article, We’re Spent, David Leonhardt illustrates the need to pivot and repurpose the American economy toward more of an investment and production economy, with rising exports, expanding factories and more good-paying service jobs.

    Leonhardt states in We’re Spent, “But the real culprit — or at least the main one — has been hiding in plain sight. We are living through a tremendous bust. It isn’t simply a housing bust. It’s a fizzling of the great consumer bubble that was decades in the making…The auto industry is on pace to sell 28 percent fewer new vehicles this year than it did 10 years ago — and 10 years ago was 2001, when the country was in recession. Sales of ovens and stoves are on pace to be at their lowest level since 1992. Home sales over the past year have fallen back to their lowest point since the crisis began. And big-ticket items are hardly the only problem.”

    One of the reasons I started Upstart: Business and Management for 20-40 Year Old Professionals, was because the world is not changing: it already has, and America’s newest leaders need a new framework for how they do business – for how they see the world they will be doing business within, while it evolves at a frenetic pace.  America still has a lead, but better not think that the global community is as loyal to the American idea as it once was. America is running a race with obsolete techniques and goals, so eventually we will win the race that nobody else is running anymore – and we won’t be America as we know it now – anymore.

    Unless we do something valuable and long-term now.

    Good Luck.

    Calvin Wilson
    Founder and CEO
    Upstart: Business and Management for 20-40 Year Old Professionals
    calvin.wilson1@verizon.net
    http://twitter.com/Upstart__Nation

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    1. webuyanycar says:

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