Showing posts with label Conspicuous Consumption. Show all posts
Showing posts with label Conspicuous Consumption. Show all posts

May 07, 2008

Adding insult to injury: Bush says starving India eats too much

By Kavita Krishnan

May 7, 2008 -- Karl Marx, born on 5 May, 1818, nearly two centuries ago, had in 1867 laid bare the ``intimate connection between the pangs of hunger of the most industrious layers of the working class, and the extravagant consumption, coarse or refined, of the rich, for which capitalist accumulation is the basis'' (Capital Vol. 1, Ch. 25). In May 2008, nearly a century and a half later, as we hear Emperor Bush hold forth on global hunger, we are reminded that capitalism and global wealth remains just as intimately wedded to hunger.

The global policeman Bush, in the time-honoured traditions of the backyard bully, has long harboured the habit of dictating to nations who their friends and enemies should be. Now, he has taken to telling nations how much they should eat, and of wagging a disapproving finger at poor nations whose middle class has made some improvements in its diet.

Bush's sentiments (and those of his lieutenant Condoleezza Rice) reek of callous contempt for the world's poor. They lay bare the fact that the only perspective Bush and US imperialism is capable of is that of the US corporations. In Bush's words, the growing purchasing power of the middle class in the developing world is ``good'' because ``y'know, it's hard to sell products into countries that aren't prosperous'' (see http://timesofindia.indiatimes.com/articleshow/3006775.cms), he said on May 3. But, lamented Bush, ``you start getting wealth, you start demanding better nutrition and better food''. In other words, India's growing appetite was pushing food prices up and causing the rest of the world to go hungry. Unfortunately, the world's people haven't mastered the art of being markets, not mouths: of tightening the belt over their bellies while loosening their purse strings ...

Bush is the head of the nation whose successive governments used its military to ruthlessly batter a long list of Latin American and African countries into being pliant suppliers of cash crops for the US corporations; and in the process devastating the food security of these nations. Major General Smedley Butler has described how, as a US marine, he had been ``a high class muscle-man for Big Business...a gangster for capitalism'' who had helped to make Honduras, Mexico, Haiti, various Central American republics, Nicaragua and the Dominican Republic ``safe'' for plunder by US fruit, oil, and sugar corporations and banks in the early twentieth century. Washington's latest exploit has been to ``make Iraq safe'' for US oil corporations, in the process devastating its economy, its infrastructure, and its thriving health and education structures. Now, Bush has the gall to offer in charity what his nation has plundered by military muscle and economic arm-twisting. Like a rapacious wolf dressed up as a kindly and nurturing mother, he describes the US as an ``unbelievably compassionate and generous nation'' and offers to help the poor countries out by ``buying food directly from farmers as opposed to giving people food''. So, the deepest desire of the US corporations –- to have the farmers of developing countries as captive and direct producers for them alone -– is projected by Bush as generosity!

The US today along with a small and exclusive club of ``developed'' countries guzzles a disproportionate share of the world's scarce resources including fuel, paper and food. It is also responsible for a disproportionately high share of global pollution. Although constituting only 5 per cent of the global population, the US emits more carbon dioxide, consumes more paper and other forest products, and produces more municipal waste than any other country. Yet Bush refused to curb carbon emissions in the US, saying ``the American way of life is not negotiable'', and peddling the absurd theory that cows were more responsible for such emissions than cars, and so countries like China and India ought therefore to bear a greater burden of curbing emissions!

Annual per capita foodgrains consumption in the US is over five times that of India, and three times that of China, according to figures released by the US Department of Agriculture for 2007. On average, a US citizen consumes 1046 kg of grain, and around 20 times more meat and fish and 60 times more paper, gasoline and diesel than the average Indian. But in India, since the entry of globalisation, the average per capita consumption of food grain has actually gone down from 177 kg per person to 155 kg per person: which is the same as the hunger levels seen during famine in times of the British Raj. And in India, foodgrains absorption is rising fast for the (mainly urban) middle class, which boosts the national average. A large section of the rural poor are actually reduced to as low as 136 kg per capita per year –- which is the same as that of starvation-hit sub-Saharan Africa. Bush grudges the 350 million-strong Indian middle class its improved diet: he is blithely silent about more than 350 million rural Indians who are below the average food energy intake of sub-Saharan African countries! Studies have shown a long-term tendency towards declining per capita calorie consumption, especially in rural India -– that is, Indians are growing hungrier year after year. Deaths by hunger are an all-too common phenomenon which Indian rulers are united in denying.

And these millions owe their hunger directly to the rural job losses, income decline, land grab, slashed government expenditure on rural development, slashed PDS and increased grain exports -– all of which are policies aggressively promoted by the US-backed IMF-World Bank, and faithfully forced on Indian people by Indian Prime Minister Manmohan Singh and his predecessors.

Of course, the actual food consumption of the poor Americans is less than the national average. Hunger and homelessness are a growing phenomenon in the US, the world's richest country. According to the US Department of Agriculture, in 2006 more 35 million people lived in food-insecure households, including 13 million children. Adults living in over 12 million households could not eat balanced meals and in more than 7 million families someone had smaller portions or skipped meals. In close to 5 million families, children did not get enough to eat at some point during the year. This hunger at home is all the more horrific when one knows that more than sufficient food grains are grown in the US –- but is fed to cars as ``bio-fuel'' rather than to hungry people!

Bush's bratty and bullying arrogance is really nothing new: we expect nothing better. The real question is why Manmohan Singh, our prime minister, describes a man with such contempt for India and for the poor of the world, as ``India's best friend''? Why insist on continuing with US-dictated policies which favour imperialism and force millions of Indians to live in misery and hunger?

[Kavita Krishnan is an editorial board member of Liberation, central organ of the Communist Party of India (Marxist-Leninist) -- CPI (ML) Liberation.]


January 18, 2008

Chad Hudson . Great American Spending Boom Over?

Again, this article falls into the "I couldn't agree more" category!! Have a look at some of the REAL stats not showing up in the mainstream media. And remember, the commercial real estate slump has already started . Also, take a look at that COVERUP of stats on retail. Who's in charge of putting them out?

I predicted that, so did others, that suburban strip malls and "office space" cannot go on uneffected with peak oil. There real estate valuations
were overstated for YEARS .. and now the crash is underway.

I read, with amusement, Krugman today. He still ain't gettin' it. Not REALLY.

Remember: buy shares of bicycle and running shoes manufacturers. No, I'm not being facetious at all. Even the oil services industry is downsizing as they see the fix is in. It doesn't take a genius or even a pro to read the signs.

I will resist the urge to comment on this article - just highlight! I will resist the urge!!

Check out solari.com - or if you have better advice, post it below.

The ONLY thing that sold over the holidays was gift certificates! That's the take, the STUFF we are told to buy is not very attractive when you can't decide to pay your mortgate or for your car ..

As I am fond of saying .
"who's kidding who"
and
"hardly surprising".

V



Is the Great American Spending Boom Over?

by Chad Hudson

Over the past month, more and more economists have moved over into the recession camp. The latest Wall Street Journal survey of economist found there is a 42% probability of a recession.

This was up from 38% last month and 23% six-months ago. While the odds of a recession have increased, only three out of fifty-four economists surveyed actually forecast a recession as their base case scenario. Even if a recession is not forecasted by most economists, the outlook is not rosy. The average expected growth rate for the first half of the year was only 2.0%. Last month, it was 2.5%. Additionally, economists expect the unemployment rate to increase from 5.0% in January to 5.2% at the end of the year. Inflation expectations have also increased. Last month, economists expected year-over-year consumer prices to be up 2.5% in June 2008. Economists now forecast a 2.7% increase. Inflation will continue to be the thorn in the side of the Fed.

Greenspan threw his hat into the recession camp. In an interview with the Wall Street Journal, the former Federal Reserve chairman said that the odds were still close to 50% that the US will slip into a recession, but it's "more likely higher than lower." Of course, he is now working for a hedge fund that made over 500% betting against subprime last year.

The hope among economists rests on the Fed being able to save the day. There has been very little evidence that the Fed has been able to instill confidence in the market or stabilize the economy. Additionally, there is the idea that the housing market will start providing some support simply because it has declined so much it cannot keep going lower and the quarter-to-quarter change has to stabilize. Even Greenspan said that new home sales have likely bottomed because the number of subprime and Alt-A mortgages has fallen to zero. While it's true that the subprime and Alt-A mortgage market has seized up, there is no evidence that prime borrowers are stepping up to the plate.

Well it is now official, holiday sales were weak. The International Council of Shopping Centers reported that the two-month gain was 2.2%, the lowest increase since 2002. December sales were only 0.9%. The retail trade group does not expect this month's sales to be much better, only 1.5% - 2.0% increase is expected.

The government's tally was even worse. The Commerce Department reported that December retail sales dropped 0.4%. Additionally, November's results were revised lower, from 1.4% to 1.0%. The year-over-year gain increased only 3.2%. Inflation is having an impact on retail sales. Two of the strongest categories were gasoline stations and food and beverage stores. This was helped by an 18.1% increase in gasoline sales and a 5.2% gain in food & beverage. The more discretionary retailers showed much weaker results. Furniture sales were down 0.2%, clothing -0.3%, sporting goods 0.8%, restaurants 0.8%. This was the weakest year-over-year increase in restaurants since January 2003, this helps show the strain on consumers. It appears that consumers curtailed spending at restaurants to buy presents, and gift buying was not that great. While there might be a pop in January as the gift cards get spend, we would expect the downtrend in consumer spending to remain on a downward path and likely accelerate.

The number of retailers that have guidance down fourth-quarter guidance is staggering and cuts across all types of segments. Wal-Mart lagged retailers during the first part of 2007, but the slowdown in consumer spending has widened into the middle and higher end customers. The string of retailer's that have warned of lackluster holiday results December marketed only the fifth month in the past five year that Target's same store sales were worse than Wal-Mart's. This was also the largest difference since November 2002. Wal-Mart has much more of its business based on staples type products, whereas Target has much more discretionary purchases. Other retailers that have announced that results would not meet previous expectations were: Sears, Circuit City, Tiffany's, Williams-Sonoma. Just as Target showed, the slowdown in spending has widened to higher income households.

Inventory levels will be the important metric to watch for the retailers. This week, Williams-
Sonoma lowered fourth quarter guidance when it reported it holiday sales results. For the nine-week holiday period, same store sales dropped 0.4% and total sales increased 4.4%. Additionally, the company said that for the full quarter sales are likely to increase by 8.6% to 10.4%. These look like very good results, but the company has an extra week this year compared to last year's fourth quarter. On a comparable basis, total sales are expected to increase only 2.7% to 4.2%. For the nine-week holiday period, sales increase might prove lofty as sales for the nine-week holiday period increased only 4.4% with same store sales declining by 0.4%. Adding insult to injury, inventory levels are projected to be 9% to 13% higher then last year. This will pressure gross margins during at least the next quarter and possibly longer.

Earnings estimates for the fourth-quarter have plunged. At the beginning of the fourth quarter S&P 500 earnings were expected to increase by 11%, now S&P 500 earnings are expected to drop by 10%. It should come to any surprise that consumer discretionary and financial earning led the decline. Financial earnings are expected to drop 69.3% compared to a gain of 2.6% expected in October. Consumer discretionary companies are expected to post a 5.5% increase in earnings compared to 18.5% three months ago. First quarter estimates have been halved over the past three months, from 9.3% growth to 4.4% last Friday. Full year 2008 earnings growth, however, has actually increased from 11.3% to 15.2%. This is a function of analysts taking down 2007 earnings estimates, but only slightly reducing 2008 earnings. Investors have already starting pricing in lower earnings for the full year. Several pundits think that 2008 earnings growth expectations have already been lowered to only 3.6%.

This is based on using a year-end PE multiple of 15, which is the two-year average. Obviously, there can be multiple contraction, especially under anemic earnings growth. But the counter argument is that ten-year yields are back under 4.0%. Regardless, the S&P 500 has posted its worse start in over 20 years and several economists are forecasting a recession. A significant amount of bad news has been priced into the market and investors will take solace if the bad news stops. Unfortunately, it's much more likely that that bad news is really just starting.


Chad Hudson
Mid-Week Analysis

September 10, 2007


Here's acute addiction and sickness

A right case of Veblen's Conspicuous Consumption riddles our planet

Top US hedge fund managers earn 22,255 times pay of average worker




By Kate Randall
7 September 2007


Two new reports document the staggering growth of income inequality in the United States, which grew last year to records levels.

Leading the list in pay and compensation were the nation’s top 20 private equity and hedge fund managers, who pocketed an average annual income of $657.5 million, or 22,255 times the pay of the average US worker.

“Wages and Bonuses in Investment Banking,” a report issued by the US Bureau of Labor Statistics (BLS), concludes that average pay in the investment banking sector, which includes hedge funds and private equity firms, is ten times the average for all private sector jobs, even when the modest pay of clerks, secretaries and others in the investment banking field is included.

A study by the Institute for Policy Studies (IPS) and United for a Fair Economy (UFE), “Executive Excess 2007: The Staggering Social Cost of US Business Leadership,” examines the earnings of top executives in publicly held US companies, as well as the astronomical wages for executives in businesses fueled by the private equity boom.

*snip* continue reading HERE, for more riveting tales and statistics ...

See Also:
US census report shows falling earnings, rise in uninsured [30 August 2007]
Recent tax data shows widening gap between rich and poor in US
[27 August 2007]
US: CEO pay climbs to “stratospheric heights”
[11 June 2007]
Top hedge-fund managers average $550 million in income
[27 April 2007]



50 Years Is Enough Network: Women
http://www.50years. org/issues/ women.html




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