Re: Is the economy this bad?

by Aaron Sun Jul 27, 2008 7:15 pm

The upgrades at Amos are part of what is causing the blue haze Sherman.

by **Stephanie** Mon Jul 28, 2008 7:51 am

The economy is THIS bad:

http://www.nytimes.com/2008/07/28/business/economy/28credit.html?_r=2&oref=slogin&oref=slogin

Worried Banks Sharply Reduce Business Loans
By PETER S. GOODMAN

Published: July 28, 2008

Banks struggling to recover from multibillion-dollar losses on real estate are curtailing loans to American businesses, depriving even healthy companies of money for expansion and hiring.
Two vital forms of credit used by companies — commercial and industrial loans from banks, and short-term “commercial paper” not backed by collateral — collectively dropped almost 3 percent over the last year, to $3.27 trillion from $3.36 trillion, according to Federal Reserve data. That is the largest annual decline since the credit tightening that began with the last recession, in 2001.
The scarcity of credit has intensified the strains on the economy by withholding capital from many companies, just as joblessness grows and consumers pull back from spending in the face of high gas prices, plummeting home values and mounting debt.
“The second half of the year is shot,” said Michael T. Darda, chief economist at the trading firm MKM Partners in Greenwich, Conn., who was until recently optimistic that the economy would continue expanding. “Access to capital and credit is essential to growth. If that access is restrained or blocked, the economic system takes a hit.”
Companies that rely on credit are now delaying and canceling expansion plans as they struggle to secure finance.
Drew Greenblatt, president of Marlin Steel Wire Products, figured it would be easy to get a $300,000 bank loan to finance a new robot for his factory in Baltimore. His company, which makes parts for makers of home appliances, is growing and profitable, he said. His expansion would add three new jobs to an economy hungry for work.
But when Mr. Greenblatt called the local branch of Wachovia — the same bank that had been aggressively marketing loans to him for years — he was distressed by the response.
“The exact words were, ‘We’re saying no to almost everybody,’ ” Mr. Greenblatt recalled. “This is why God made banks, for this kind of transaction. This is going to slow down the American economy.”
Earlier this year, credit extended by banks to companies and consumers was still growing at double-digit rates compared with three months earlier, according to an analysis of Federal Reserve data by Goldman Sachs. By mid-June, bank credit was declining at an annualized pace of more than 6 percent.
That is a drop of nearly $150 billion, an amount much larger than the value of the tax rebates the government has sent to households this year in an effort to spur economic activity.
Financial industry executives say tighter credit from major banks represents a swing back to a realistic assessment of risk, after years of handing out money with abandon. Those practices produced a mortgage crisis whose losses could reach $1 trillion, by many estimates.
“Before, they wouldn’t verify income and they were loose on the valuations of collateral,” said John W. Kiefer, chief executive of First Capital, a private commercial lender. “Now they’re tightening down on the ability to repay. They go off the reservation, and now they come back to basics. It’s preservation for many of them at this point. It’s survival.”
But if the newfound caution of American banks is prudent in the long run, the immediate impact is amplifying the troubles with the economy. The Federal Reserve has been lowering interest rates aggressively to make money flow more loosely and to spur economic activity.
The financial system is not going along: As banks hold on to their dollars, mortgage rates are climbing. So are borrowing costs for corporations.
Some suggest that the banks, spooked by enormous losses, have replaced a disastrously indiscriminate willingness to hand out money with an equally arbitrary aversion to lend — even on industries that continue to grow.
“There’s been a lot of disruption in the credit market, and a lot of traditional lenders have really tightened up,” said Gregory Goldstein, president of Macquarie Equipment Finance, which leases computer gear and other technology to companies. “Before, some of the standards they lent on were weak, but we think they have overshot and gone too far on the other end.”
Such was Mr. Greenblatt’s reaction, as he learned that an infusion of credit for his Baltimore factory would not come easily. His company has been enjoying double-digit sales growth. This month, it received the two largest orders in its history, he said.
“It was jubilation,” he said. “I was doing the Funky Chicken.”
The initial call to Wachovia left him dismayed.
“I’m stunned,” Mr. Greenblatt said. “God is smiling on this factory. We’re at such an exciting inflection point, and this is what a bank is supposed to do. There’s sand in the gears.”
No loan meant one fewer order for the factory in Chicago that makes the robot Mr. Greenblatt wants to buy, and fewer hours for workers there. It meant less business for the truck driver who would have hauled the robot to Baltimore, and no help-wanted ads for Marlin Steel Wire Products.
Mr. Greenblatt eventually got oral approval for the loan, though after more than a week. He was still waiting for the money at the end of last week.
Wachovia, which lost $8.9 billion in the second quarter, declined to discuss the loan. But the bank confirmed that it has been reducing its lending in troubled areas of the economy.
“We’ve got industries that we consider to be stressed industries, and we’re looking at those a lot harder,” said Carlos Evans, a wholesale banking executive for Wachovia, listing as examples housing construction, building products and distributors for those goods. “Our loan growth slowing is more indicative of the economy than anything else.”
Still, Wachovia’s commercial and industrial loans grew by 13 percent in June compared with the prior year, Mr. Evans said.
“We’re saying yes daily,” he said.
But recent signs suggest that tight lending is spilling from housing into other areas of the business world. Companies with solid credit and profitable businesses can generally still get loans, but rates are higher and wait times are longer.
According to a survey of senior loan officers conducted by the Federal Reserve in April, 55 percent of American banks tightened lending requirements for commercial and industrial loans to large and midsize companies — up from about 30 percent in the previous survey, in January. About 70 percent of the respondents said they have made such loans more expensive.
“Banks will be much more cautious and keep raising the bar, and that will lead to an outright decline in total commercial and industrial loans,” predicted Stuart G. Hoffman, chief economist at the PNC Financial Services Group in Pittsburgh. “Banks clearly have to rebuild their capital base. They’re going to look a bit more nervously before they make those loans.”
Until last summer, banks lent freely, banking experts say, because they sold most of the loans they issued, making them less concerned about whether the customer could handle the payments: If the loan went bad, that was someone else’s problem.
But in the wake of the mortgage crisis, that system has all but shut down. Banks are now stuck with the loans they extend, making them more motivated to scrutinize their customers, particularly younger and smaller businesses.
“It’s the small business guy who creates most of the jobs,” said Mr. Kiefer, the First Capital chief executive. “If they can’t borrow to employ people, then we’ve got a mess on our hands.”
For the last six months, Saul Epstein has been trying in vain to get a $2 million line of credit for his company, Global Harness Systems. The company, based in Bala Cynwyd, Pa., has a factory in Mexico, where it makes parts for engines. The factory gets paid for its wares weeks after they have shipped, necessitating credit to finance the upfront costs of production — raw materials, labor and transportation.
Mr. Epstein figured that getting a loan would be easy. Since he became chief executive last year, Global Harness has gone from break-even to profitable. Sales should reach $20 million this year, up from $17 million last year, he said. But in this new era of caution, banks are focused on the fact that Global Harness lost money in 2005.
“They keep saying, the way the times are, we need a longer track record,” Mr. Epstein said.
Mr. Epstein, forced to limit his production to what he can finance with his existing cash flow supplemented by his own money, has been tightening credit himself: He has been turning down orders from companies with any whiff of financial troubles, lest his company fail to get paid.
“The same way the bank is hesitant to lend to me, you’re concerned about taking on a customer that might go into bankruptcy,” he said.
George Rosero, president and chief executive of Atlanta Pediatric Therapy, has been trying for more than a month to increase his roughly $500,000 credit line to about $1 million.
His company, profitable for the last two years, offers therapy to children with speech and physical impediments, he said. Mr. Rosero aims to expand by adding four sales people. He wants to buy new software to better manage communications with patients and hire a consultant to improve the work environment.
All of that is on hold.
“Three or four years ago, I could just make a phone call and get an increase,” Mr. Rosero said. “Now, they’re asking me for a lot more information.”

by Aaron Mon Jul 28, 2008 7:56 am

So banks are making much more sound, fisical decision and this is a bad thing how?

by **Stephanie** Mon Jul 28, 2008 8:17 am

Aaron,

Did you read the article? Did you read what the economists are saying?

The banks needed to tighten up and not make loans without verifying income, and not make loans to individuals that exceed their ability to repay. They are now denying loans to successful companies, particularly small businesses, which is where most of the job growth is. No loans, no new jobs. They're making all of America pay for the mess they created and the result is higher unemployment.

by shermangeneral Mon Jul 28, 2008 8:31 am

also just look at the stock market...

by Aaron Mon Jul 28, 2008 8:50 am

Financial industry executives say tighter credit from major banks represents a swing back to a realistic assessment of risk, after years of handing out money with abandon.

Yes Stephanie, I read the article. As I stated earlier, banks making sound, fiscal decisions is a good thing.

“Now they’re tightening down on the ability to repay. They go off the reservation, and now they come back to basics. It’s preservation for many of them at this point. It’s survival.”

After all, they did take a hit in the housing market and as a result, they have less money to lend. If you have less money to spend, don't you watch every penny? Why should banks be any different.

Mr. Greenblatt eventually got oral approval for the loan, though after more than a week. He was still waiting for the money at the end of last week.

If a business is worthy of a loan and it makes sense, the company has a favorable credit history and a true need for the loan, then sooner or later, that business will get the money for investments they need.

“We’ve got industries that we consider to be stressed industries, and we’re looking at those a lot harder,” said Carlos Evans, a wholesale banking executive for Wachovia, listing as examples housing construction, building products and distributors for those goods. “Our loan growth slowing is more indicative of the economy than anything else.”
Still, Wachovia’s commercial and industrial loans grew by 13 percent in June compared with the prior year, Mr. Evans said.
“We’re saying yes daily,” he said

Banks are just looking at their customers much more closely and ensuring they are making a wise investment as well.

Mr. Epstein figured that getting a loan would be easy. Since he became chief executive last year, Global Harness has gone from break-even to profitable. Sales should reach $20 million this year, up from $17 million last year, he said. But in this new era of caution, banks are focused on the fact that Global Harness lost money in 2005.

And not throwing money after one hit wonders.

So I repeat, how is banks making sound, fiscal decisions a bad thing?

by Aaron Mon Jul 28, 2008 8:53 am

shermangeneral wrote:also just look at the stock market...

The stock market's been in bull mode for most of the past 20+ years Sherm. Part of what is going on right now is a correction and has to happen. This is the time when millionaires become billionaires. Were you a smart man, you'd invest everything you have in the market.

by **Stephanie** Mon Jul 28, 2008 9:29 am

Aaron,

I would hardly call a company that suffered a loss 3 years ago a one hit wonder.

None of what you have stated alters the fact that the shrinking line of credit for American businesses is hurting the economy.

Two vital forms of credit used by companies — commercial and industrial loans from banks, and short-term “commercial paper” not backed by collateral — collectively dropped almost 3 percent over the last year, to $3.27 trillion from $3.36 trillion, according to Federal Reserve data. That is the largest annual decline since the credit tightening that began with the last recession, in 2001.

“The second half of the year is shot,” said Michael T. Darda, chief economist at the trading firm MKM Partners in Greenwich, Conn., who was until recently optimistic that the economy would continue expanding. “Access to capital and credit is essential to growth. If that access is restrained or blocked, the economic system takes a hit.”

“Banks will be much more cautious and keep raising the bar, and that will lead to an outright decline in total commercial and industrial loans,” predicted Stuart G. Hoffman, chief economist at the PNC Financial Services Group in Pittsburgh. “Banks clearly have to rebuild their capital base. They’re going to look a bit more nervously before they make those loans.”

“It’s the small business guy who creates most of the jobs,” said Mr. Kiefer, the First Capital chief executive. “If they can’t borrow to employ people, then we’ve got a mess on our hands.”

“We’ve got industries that we consider to be stressed industries, and we’re looking at those a lot harder,” said Carlos Evans, a wholesale banking executive for Wachovia, listing as examples housing construction, building products and distributors for those goods. “Our loan growth slowing is more indicative of the economy than anything else.”

These are the opinions of economists and bankers. Perhaps you'll understand why I place their combined wisdom and experience in a postion of superiority over yours!

Keep telling yourself it's all the media and all in our heads, Aaron.

We're in a recession. Tough times are here, and they'll likely get tougher. That's just the way it is. That's why my husband is working a second job, to make up for our increased spending on gas, food, and other necessities, like clothes and shoes for our kids.

by Aaron Mon Jul 28, 2008 10:01 am

Oh, I don't know Stephanie. I think not giving a company a loan that amounts to 20% of POTENTIAL sales, one that lost money 3 years ago, is not a bad decision. In fact, I'd say it's a sound, fiscal decision but that's just me.

Yes, commercial loans have declined. Did you not read the part where the banks were basically throwing money at business and customers and now do to the hit they've taken, they have less money, thus they have do a better job of making loans? Of course loans are going to decline.

I also understand the economy is slowing but I don’t believe it’s the house of cards you want to make it out to be. For one thing, no we’re not in a recession, at least not yet. There was growth in the first quarter and indicators are that the 2nd quarter will show some growth as well.

For another, housing, which is driving the losses by banks, which is creating much or our problems is backed by solid collateral. Yes, banks are taking hits not but those hits will be more then made up for in a couple of years at the very most.

And once the banks sell all of those houses for huge profits after they've taken the hit and written the losses off on thier taxes, then you'll see an increase in loans and a loosening on the requirements to make the loans. It's a cycle that has to go around and can't be rushed.

My quotes come from the same article as yours. I guess it’s all in how you see the glass. Mine is half full of water. Yours seems to be have empty but it doesn't appear to contain water. Seems more like media made kool aid to me.

by **Stephanie** Mon Jul 28, 2008 12:52 pm

Aaron,

Your quotes ignored the experts. I'm not arguing that banks should be more responsible, of course they should. What I'm stating is, you can't keep making excuses and rationalizing soaring energy prices and soaring food prices and rising unemployment and the deficit and the startling number of homes in foreclosure and the increase demands on food pantries and the lack of credit available to businesses and the trade deficit and the national debt and our fiat currency and the loss of entire industries in this country. Things aren't bad for you. They aren't terrible for my family but they are pretty darn bad for others.

Let me tell you a little something....

We don't do fastfood joints very often. A couple of times a month, maybe. About a month ago Loyd and I went with a couple of other homeschool families to McDonald's for lunch after a playdate in the South Ridge area. That Mickey D's was sorely understaffed. The assistant manager apologized for the delay explaining each day employees were calling off work because they couldn't afford the gas to drive to work.

There are a lot of people trying to get by working at places like McDonald's and an awful lot of people making $8 an hour as home health aides living out in the boonies like I do. They can't afford to go out and purchase a new car that gets 35 mpg to save on gas. They don't have a lot of options. Now you can blame them for being stupid or making poor choices or whatever you wish but the reality is that our society relies on people to do these types of jobs for low wages.

How would middle class Americans ever be able to afford their lifestyles if there weren't uneducated or undereducated and unskilled workers frying their hamburgers or giving their grandmother's baths or bagging their groceries for minimum wage?

So while you sit at your desk fat dumb and happy think once in a while about those people who for so long have been invisible to you. Consider how the increase in the cost of gas and natural gas and propane and staples like milk and eggs and fruits and vegatables is impacting them a whole lot more than it is you and the things you go without are impacting them too. Servers make less in tips if you eat out less and Walmartians lose their jobs if you aren't buying whatever gizmos and gadgets people buy there.

by Aaron Mon Jul 28, 2008 2:04 pm

I'm not setting dumb about anything Stephanie. I know from both a personal standpoint and from a business stand point just how bad the energy cost is and the effect it has on people and business. I spend more on fuel in a month then you live on in a year and I know what it's doing to my bottom line. I'm not making excuses, I'm simply stating things how they are.

As bad as the situation is, OUR economy is not in the shape that the media and your whine would make it out to be. Some banks are in trouble, but then they should be based on the decisions they made. Overall though, the banking industry is sound and strong.

Housing is down but it should be. For far too long home prices fueled by the poor loans banks were making grew much too fast and it had to crash and that is what the experts were saying 5 years ago but it didn’t stop banks from making the loans they did. They continued because they knew the government would bail them out. And they were right.

Food prices are high because the government mandates the use of ethanol. If they would back off, prices would at the very least stabilize, if not come down.

Sound, financial strong business with a proven track record can and are getting the loans they need. YOUR article shows a 13% increase in business loans from last year to this. You offered the proof and now you’re stating otherwise, contradicting yourself.

The national debt will come down. We heard this same song and dance at the end of the 80's and early 90's and it's what got Clinton elected and look how that turned out. Granted the first two years nothing happened but once Newt got control in 95, under his leadership, we were back in the black in 5 years.

Energy will come down. Supply and demand will partially take care of that. And if congress actually has the gonads to go after speculators, that would help some. What should happen is for the President to release about 1/3rd of the strategic reserve into the market and watch prices plummet by $30.00 or more a barrel and let all those speculators that drove the PPB up to $145.00 get what they deserve.

As for your tirade about fast food, let me tell you a little something.

I quite eating out 3 years ago because the Mickey D's of the world couldn't get decent employees to work for them, the quality of service went in the crapper, the food was bad and the stores were disgusting. And ‘energy’ prices weren’t the problem then. The cost of fuel was in the $2.25 range. The problem was the unemployment rate was somewhere around 4%.

Traditionally, fast food restaurants get the bottom of the barrel employees. And considering that 5% of the population that is utterly and completely useless and shouldn't be working to begin with, then it creates problems because businesses are having to settle with these employees.

Those 'employees' aren't calling off because they can't get to work due to soaring energy cost. They're calling off because they're part of the 5% of the workforce that shouldn’t be working. They’re a pathetic bunch of individuals that are only working to buy the beer or pot or pay the cell phone bill because they sure as hell aren't paying the rent or buying the food.

Honest fat dumb taxpayers that get up every morning and go to work are paying it for them and I don’t ignore those people, I employ them. Good ones I keep. Trash I send to Mickey D’s.

If an employee is worth a crap, they'll take a bus to work if they have to. Or they'll carpool. If they really want to get there, they'll find a way. And if an employee is even halfway decent, good managers will find a way to get them there.

The only thing that will change what you encountered is an unemployment rate somewhere around ~6%, which will give those managers the chance to sent the trash packing.

by **SheikBen** Mon Jul 28, 2008 9:22 pm

Hi Stephanie,

I agree with your general tenor. I would say, though, that if the lifestyle of the middle class is dependent on underpaid workers, maybe it's time to redefine what kind of lifestyle should be expected by the middle class.

by **SheikBen** Mon Jul 28, 2008 9:24 pm

Not that government should do it, but rather that it's time to make different choices and perhaps those choices, if made by enough people, will eventually help.

I think a great deal of good could be done, for example, by people en masse comparing the salaries of, say, the average worker at walmart and the average worker at Target, and then shopping where the worker is paid the best. Perhaps one could also find if Reebok sweatshops are any more civilized than Nike sweatshops. When choosing a home health aide for a sick parent, compare not only the cost to you but also the pay given to the aide (and you might find the more expensive aide to be the better deal, incidentally).

by **Stephanie** Tue Jul 29, 2008 7:22 am

I agree it is terrible that so many of us are reliant upon underpaid workers to make our lives enjoyable. I disagree with Aaron's assertion that those who work in for peanuts are all people who shouldn't be working because they are drunks or druggies or whatever, but I never have been able to tell Aaron anything.

I've heard that Walmart compensates quite a bit better than Kmart. lol My mother, who stayed at home to raise my brothers and I, got her first fulltime job at CVS about 13 years ago at about age 49. She's the photolab manager now and they pay her crap but my parents have their health & dental through them, and she has a 401K, finally qualified for SS benefits in this time, and she has found they saved a LOT of money by purchasing their homeowners and auto coverage through them. Her paychecks are puny but that's a huge help to my father who shouldered 100% of the bills for 30 years.

by Aaron Tue Jul 29, 2008 8:11 am

I didn't say all workers Stephanie. I said that 5% of the workforce is totally incompetant and useless and when unemployment dips to 5% or lower, that is the type of employees the McDonalds or the world have to hire. You assumed that when it came to your experience that employees couldn't get to work because of energy cost. I say the ones that can get to work are riding the bus to Wal Mart, Home Depot and Lowes, which all pay at least a little higher then McDonalds and that only leaves the bottom of the barrel for the McDonald'sedited, Wendy's and Taco Bell's of the world.

If we truely are in a recession as you state and unemployment does rise, then at least rest assured that some of those places will have access to better workers.

Every cloud has a silver lining, don't you agree!!!

Very Happy

by TerryRC Tue Jul 29, 2008 10:39 am

Aaron:this can be fixed fairly quickly by stopping mandatory use of ethonol.

Terry: Except I can't believe it will help food prices that much.

Most of the corn acres being used for EtOH were used for field corn. Stopping the mandatory EtOH might bring down beef, pork, poultry, eggs and milk a little bit but not so much as you would really feel relief.

Sam C. -laughing emoticon-

Spit it out, Sammy.

Field corn is not generally used directly in human foods, but rather ends up as sileage, just like I said.

What is there to laugh about in that statement?

by SamCogar Tue Jul 29, 2008 12:04 pm

TerryRC wrote:Aaron:this can be fixed fairly quickly by stopping mandatory use of ethonol.

Terry: Except I can't believe it will help food prices that much.

Most of the corn acres being used for EtOH were used for field corn. Stopping the mandatory EtOH might bring down beef, pork, poultry, eggs and milk a little bit but not so much as you would really feel relief.

Sam C. -laughing emoticon-

Spit it out, Sammy.

Field corn is not generally used directly in human foods, but rather ends up as sileage, just like I said.

What is there to laugh about in that statement?

Educate yourself dumbass, by reading this: A Zillion Uses for Corn!

And I won't be laughing at you so much so often.

But you will need lol!

in accomplishing that learning feat.

And a few food items that use corn or cornmeal that are not on that list are:

cornbread
corncakes
Hushpuppies
corndogs
hominy
grits
mush
stuffing
etc.

And here is some "corn food" for thought ........ for those capable of thinking.

There have been five previous periods when corn futures exceeded $3.50 per bushel. Those were in 1974, 1980, 1983, 1988, and 1996. In contrast to this year, each of those was associated with a weather related short crop. Two of the years, 1974 and 1996 were also associated with periods of strong demand as is evident this year.

In mid-January, 2008, corn was trading over $5 per bushel, close to its historic high.

The Outlook for Corn Prices in the 2008 Marketing Year

The final situation we examined is what would happen to corn prices if we had a return of a 1988-style drought (No drought yet in 2008, but those mid-West floods were worse than any drouth) when corn yields were almost 25 percent below trend levels. Keeping the mandate in place would have a large impact on corn and ethanol prices. The expected price of corn would increase to $8.62 per bushel—54 percent above baseline levels—while the expected price of ethanol would have to be bid up to $3.30 per gallon to induce ethanol producers to meet mandated consumption levels. This price of ethanol means that total ethanol subsidies under these drought conditions would average $1.50 per gallon, for a one-year total subsidy of $15 billion. Relaxing the mandate, the expected price of corn in this type of drought condition would still increase to $7.28 per bushel. The ethanol industry would be working at less than half of its capacity, with a total ethanol supply of about 5.2 billion gallons, which is adequate to meet oxygenate requirements and clean air mandates.

http://www.card.iastate.edu/iowa_ag_review/spring_08/article2.aspx

Is the economy this bad? - Page 2 197570

.

by **Stephanie** Tue Jul 29, 2008 11:41 pm

Aaron wrote:I didn't say all workers Stephanie. I said that 5% of the workforce is totally incompetant and useless and when unemployment dips to 5% or lower, that is the type of employees the McDonalds or the world have to hire. You assumed that when it came to your experience that employees couldn't get to work because of energy cost. I say the ones that can get to work are riding the bus to Wal Mart, Home Depot and Lowes, which all pay at least a little higher then McDonalds and that only leaves the bottom of the barrel for the McDonald'sedited, Wendy's and Taco Bell's of the world.

If we truely are in a recession as you state and unemployment does rise, then at least rest assured that some of those places will have access to better workers.

Every cloud has a silver lining, don't you agree!!!

McDonalds will have better workers making wages they can't support themselves on. That's what will happen. That's supposed to make me feel better?

by SamCogar Wed Jul 30, 2008 5:50 am

Now in that the serving of hamburgers and french fries requires a highly trained and technical savy person, ...... I think that all employees of Burger King and McDonalds should be paid a minimum of $99.69 per hour.

.

by Aaron Wed Jul 30, 2008 6:16 am

Stephanie wrote:
Aaron wrote:I didn't say all workers Stephanie. I said that 5% of the workforce is totally incompetant and useless and when unemployment dips to 5% or lower, that is the type of employees the McDonalds or the world have to hire. You assumed that when it came to your experience that employees couldn't get to work because of energy cost. I say the ones that can get to work are riding the bus to Wal Mart, Home Depot and Lowes, which all pay at least a little higher then McDonalds and that only leaves the bottom of the barrel for the McDonald'sedited, Wendy's and Taco Bell's of the world.

If we truely are in a recession as you state and unemployment does rise, then at least rest assured that some of those places will have access to better workers.

Every cloud has a silver lining, don't you agree!!!

McDonalds will have better workers making wages they can't support themselves on. That's what will happen. That's supposed to make me feel better?

First off, no one is supporting themselves on mininum wage at McDonalds. They're likely getting food stamps (or whatever it is that passes for food stamps these days) free housing, utility subsidies, day care and if they choose, they can get a free education.

The ONLY people 'supporting' themselves at McDonalds on mininum wage are supporting a cell phone (or something similar) or a habit.

You can feel sorry for them if you like. As I deal with this type of employee daily, I don't.

by **Stephanie** Wed Jul 30, 2008 7:36 am

Aaron wrote:
Stephanie wrote:
Aaron wrote:I didn't say all workers Stephanie. I said that 5% of the workforce is totally incompetant and useless and when unemployment dips to 5% or lower, that is the type of employees the McDonalds or the world have to hire. You assumed that when it came to your experience that employees couldn't get to work because of energy cost. I say the ones that can get to work are riding the bus to Wal Mart, Home Depot and Lowes, which all pay at least a little higher then McDonalds and that only leaves the bottom of the barrel for the McDonald'sedited, Wendy's and Taco Bell's of the world.

If we truely are in a recession as you state and unemployment does rise, then at least rest assured that some of those places will have access to better workers.

Every cloud has a silver lining, don't you agree!!!

McDonalds will have better workers making wages they can't support themselves on. That's what will happen. That's supposed to make me feel better?

First off, no one is supporting themselves on mininum wage at McDonalds. They're likely getting food stamps (or whatever it is that passes for food stamps these days) free housing, utility subsidies, day care and if they choose, they can get a free education.

The ONLY people 'supporting' themselves at McDonalds on mininum wage are supporting a cell phone (or something similar) or a habit.

You can feel sorry for them if you like. As I deal with this type of employee daily, I don't.

Sure I empathy for them, Aaron. These are people who are employed yet reduced to requiring public assistance to survive. That's shameful, anyway you look at it.
What really gets me is you say there should be no safety net to help these people.

Do you think that the assistance they the government provides them is adjusted monthly to cope with the rising costs of food and energy? Do you think McDonald's gives its employees raises because of what the increasing price of petroleum and corn products are doing to the price of everything they have to buy?

Oh wait, it doesn't matter because all of those employees in all of those industries aren't worthy of being in the workforce in your eyes so none of that matters.

by Aaron Wed Jul 30, 2008 7:52 am

I would venture to say the manager at McDonalds that was making excuses to his customers is a little closer to my way of thinking then yours when it comes to the vast majority of these employees.

That manager was likely one of them struggling to get by but came to work on time, worked hard and was willing to learn so they know first hand what it takes to get ahead.

If you've had to adjust a work schedule or go a man or two short because someone consistently calls in or shows up late, you'd lose that empathy as well. Especially if that person comes in to pick up a check in their off time wearing $300.00 worth of Nike clothes, talking on a $200.00 I phone and you know they live in public housing.

Perhaps if they didn't have the 'safety net' you cherish so much, they couldn't afford all the extras and might actually have to become a dependable, productive member of society.

by **Stephanie** Wed Jul 30, 2008 9:39 am

You haven't got a freaking clue what you're talking about, Aaron. Not a freaking clue.

You're talking about people living at home with their parents or sponging off a schmuck girlfriend working to pay for those extras. They aren't getting food stamps or heating assistance. Not everybody working for unlivable wages has somebody else taking care of them.

The people actually trying to support themselves on those wages can't purchase cell phones and trendy clothes. They're going to work and trying to make ends meet.

by shermangeneral Wed Jul 30, 2008 10:52 am

Steph like John Edwards said there are two Americas and Aaron knows precious little about the other America.

He obviously looks with contempt and disdain on his less fortunate brethren.

by SamCogar Wed Jul 30, 2008 1:09 pm

Stephanie wrote:You haven't got a freaking clue what you're talking about, Aaron. Not a freaking clue.

You're talking about people living at home with their parents or sponging off a schmuck girlfriend working to pay for those extras. They aren't getting food stamps or heating assistance. Not everybody working for unlivable wages has somebody else taking care of them.

The people actually trying to support themselves on those wages can't purchase cell phones and trendy clothes. They're going to work and trying to make ends meet.

And too think that the School System spent close to $100,000 to try to educate them.

What a waste of money.

They should have just turned them out at the end of their 6th or 8th Grade then they could of hung out on the street corner until they were old enough to get a job "shoving burgers n' fries" ..... and that would save the taxpayers the expense of 4 or 6 years of babysitting them in the schools.

A savings of $32,000 to $50,000 per.

.

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