Friday, December 05, 2008

Layoffs and Such

We haven't hit bottom in our recession yet. For all of the bailouts and loans to financial institutions, the theory of "trickle down economics" just doesn't work. If the middle class isn't working, that means they aren't spending money (or borrowing money) and that means the businesses we are bailing out are going to tank anyway.

Let's face it - if you make $5 miilion a year, are you going to spend it all? Nah - you're going to lock some of it away in stocks, bonds and CD's.

Does the money trickle anywhere? Maybe to other rich people. If you DO spend all of your $5 million, you're going to buy a Ferrari and a $4 million home. Who does the money go to? Other rich people - people who own $4 million homes and have Ferraris.

But, if you make $50,000 per year, where does your money go? Mortgages, car payments, food, clothes, transportation, etc. Does your money trickle? Damn right it does - it rewards businesses that provide mortgages, sell cars, produce food, etc. All of your money gets pumped back into the economy which supports other middle class folks.

I think - I hope - Barack Obama has some sense of all of this. We need to bail out the middle class. We need bailouts that increase work in this country - we need folks fixing roads and bridges and we need increased jobs for scientists working on problems like increasing food production, and creating clean, green energy.

Meanwhile, this is what we're seeing as we pump hundreds of billions of dollars into the big banks and financial institutions...

  • Viacom laid off 850.
  • NBC Universal laid off 500
  • Newsday laid off 100.
  • People finished laying off 18.
  • Simon & Schuster laid off 35.
  • Niche Media folded a magazine.
  • Tragedy on the homefront.
  • Google announced it's cutting its fancy job perks.
  • Sotheby's and Christie's announced pending layoffs.
  • In the corporate world, there are major layoffs going down at AT&T (12,000 workers), Goldman Sachs, Carlyle Group, Credit Suisse, and tons of other financial firms.
  • The big picture: 533,000 US job losses in November.

  • The list is from Gawker.

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