Depression Politics

The American government is about to spend 700 billion dollars in the biggest economic bailout since the Great Depression, and all the while President Bush will still not even utter the word, "recession." What's up with that? Perhaps we have moved from recession into depression already during the time our leaders were trying to deny anything was wrong.

Gas prices so high the average person couldn't afford to fill their tanks? Groceries so high we can barely feed our families? Jobs disappearing at the fastest rate in decades? Yeah, what could possibly be wrong.

Now that they have finally woken up and smelled the decaying corpse of what was once the American economy, they've decided to do something about it. I can't help but think this is a purely political attempt by Bush and the Republicans to make him look (I'm trying not to laugh as I type this) like a hero by putting yet another bandaid on a severed artery so close to election time.

Anyone who is dumb enough to applaud this quick fix and say, "Look at what a great job the Republicans did fixing this problem," needs to remember who got us into this huge financial mess in the first place. By all means, vote Republican this election if you can afford ten bucks a gallon for gasoline, you're so rich you don't need a job and you don't care how much your maid spends on groceries for your family. If you're a real, working person, you might want to consider casting a vote for the Democratic candidate.

Will the minimum wage increase help or hurt the US economy?

In the current economic climate, with so many other issues already chipping away at the US economy, the 70 cent minimum wage hike will have absolutely no effect whatsoever. Independent of skyrocketing gas prices and retail price increases the highest in 30 years, the increase may have had an impact one way or the other, but it won't even cause a blip on the economic radar now.

The only effect the 70 cent minimum wave hike has noticeably had so far is to contribute to higher unemployment rates and higher retail prices. So, the money the people who received the pay increase could have used to put back into and stimulate the economy is being negated by these two things. When you adjust for inflation, spending is actually down, even though you're paying more at the grocery store. So, if you brought home an extra 20 dollars on your paycheck by it was eaten up because of the fact that the same groceries you bought last week cost you 20 dollars more this week, the effect on the economy, as well as on your personal line, is a big zero.

The nation's employers and retailers did exactly what we knew they were going to do. They whined and moaned about how the increase was going to devastate their bottom lines. Then, when they became effective, they cut workforce and raised prices to offset what they considered huge payroll expenditures, effectively shooting themselves in the foot. Had they had the courage and foresight to weather a brief storm of a potential dip into their significantly deep pockets, they could have regained even more later because those working people who have been struggling for so long may have actually started spending some of that extra money and stimulated the economy.

Instead of allowing it to be a good thing for them in the long run, employers and retailers have effectively dashed the hopes of the pay increase doing anyone any good. They raised their prices to recoup perceived losses, making that extra 70 cents no longer extra, but necessary for people to stay at the same stagnant economic level they were at before. We have no more discretionary income than we did before the minimum wage hike went into effect, so we have no way of effectively stimulating the economy. This will cause the retailers to see even further drops in sales after adjustments for unnecessarily high inflation levels.

The answer to this question may have been much different before we dropped into the recession that no one will call a recession. However, this nation's employers and retailers have created their own self-fulfilling prophecy by setting into motion a series of job cuts and price increases that will cause the 70 cent minimum wage hike to do absolutely nothing.