I've never claimed to be an economic guru but it doesn't take a genious to figure what's happening. We're in a real mess at present. Let's give a summary.
Banks and brokers gave away the store to get a signature on contracts hence raking in the commissions and making annual reports look like the sky was the limit. Rules were tweeked or flat out ignored to seek that end result. It didn't take long for those who could not afford those loans to default. The grand and overblown scheme just started to unravel in spring of 07 but the banks and brokers were able to ward off any attention to the matter until late in 07 till about Jan. 08. Then the house of cards started falling and the impact was felt around the world. In it's true day late and dollar short manner our government took to providing an economic stimilus package to try and get things going but it was too little too late. By the time checks reached main street America, people were already walking away from their home and beginning to live on credit cards. Those not living pay check to pay check were fearful of being laid off and merely slipped that money into a savings account.
So where are we now in terms of jobs and employment? With housing down construction jobs have been hammered (pardon the pun). With gas prices up SUVs and trucks ( the highest profit items) sit collecting dust at dealers. I get at least one letter a week from dealers asking that I trade in the family car and buy an SUV. They'll even throw in cheap gas. Note that with gas prices up and SUV sales down the car makers have no choice but to lay off workers and close factories. It will take one to two years to retool plants to produce smaller more economical cars. Good luck trying to snag a Prius, Honda hybred or other econobox car. You'll find at least a six month waiting list.
Then there's the airline industry. Fuel prices have slammed them. They have no choice but to cut back on unprofitable routes, shrink staffs and eliminate older ageing aircraft. Losses just last year were put at $1 billion. They've been holding their prices while adding fees to make up a bit of the difference but that will soon change and when it does I'd bet that airlines will be putting a hold on those orders for new aircraft. The machinists who build the aircraft are racing to get wage increases before the work runs out. There's two possibilities here. Either the company heads let the union go on strike thereby putting the orders on hold. (Oh and the company gets a good percent of the price even before the plane is built) Or the company ramps up production to get as many planes out the door before the orders are put on hold by the airlines. Either way it won't be a great 2009 for the aircraft builders. Then the lay offs will start. Each aircraft worker supports at least two other jobs in the economy.
With the election comming in the next few months I'm just wondering if the Shrub will thrown one more monkeywrench in the scheme of things. Remember he was the one who when leaving the Texas governors mansion said about the sad state of Texas "That's the next guy's problem." He also was just short of flipping them off at the G8 summit.