Lastly, I think Frum is wrong on ignoring the effect of deregulation in banking. The banking issues acted as a magnifier. The influence of Wallstreet pushed the deregulation of loaning and pushed the social acceptance of living in this massive debt economy, through lobbying and advertising they made easy credit a way of life. That can't be ignored in this cycle either. Perhaps the banking reform will help to reduce the reliance people have had on loans, which will make it necessary for middle class income to catch up with cost of living.
A trade deficit makes a country poorer. Its that simple. Middle class Americans have at least kept up, if not increased, their expectations of what is "crucial" to their lifestyle, and making such cheap loans available to them was not at all in the interests of the country as a whole. But then, government doesnt control the financial sector, does it?
Even more lastly, something I thought of. Part of the problem with cost of living is that with our constant inundation of advertising, people often feel they 'need' a lot of things they really don't. What is considered middle class has a lot of pork attached on simply because its part of our social environment. How do we address that problem that is so fundamentally linked to our culture? We may see a reduction in the social acceptance of just borrowing to afford anything, but when that butts up with 'now people believe they are expected to have all these things that they now cannot afford' what is going to happen?
Yeah OK.
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Date: 27/4/10 08:27 (UTC)A trade deficit makes a country poorer. Its that simple. Middle class Americans have at least kept up, if not increased, their expectations of what is "crucial" to their lifestyle, and making such cheap loans available to them was not at all in the interests of the country as a whole. But then, government doesnt control the financial sector, does it?
Yeah OK.