Globalization AKA Lower Incomes

Let's face it, the economy is not improving. Oh, it will continue to have it's ups and downs, but something fundamental has changed over the past few decades. Trade barriers are falling and technology is making our markets accessible to the entire world.

In the 90's we had a "tech bubble". There was a euphoria of mushrooming stock markets and the feeling that the economy would expand ad infinitum. But what was really happening? Stock prices were being fueled on speculation. There were no profits to explain the phenomenon of tech company stocks going through the stratosphere. People were earning more, but they were also working a lot more. The answer was that much of our savings, including our 401k's and IRA's, were funding the bubble. When the bubble burst, so did our nest eggs.

Enter the 2000's. After struggling past 9/11, we found our economic footing again, so it seemed. Home prices continued their steep escalations. Although the boom was not as strong as the tech bubble, it burst just the same. This time our non-cash savings, AKA "Home Equity" were depleted. Foreclosures became the rule for years.

All the while, the economies in China and India were growing very well. An overwhelming amount of manufacturing left American soil and departed for China. The Internet also allowed many of the Information Technology jobs to migrate to India. While these events are a huge lift to the poor in those countries, it will continue to pull Americans into a decline of incomes.

There are many experts and economists that state that these economic problems can be remedied with government regulation. Politicians believe we can spend our way out of the current crises. But if you are graced with knowing someone that lived through the Great Depression, you might get a different answer.

Saving and economizing is foreign to those of us raised since the WW2. Throughout our lives the motto has been spend, spend, spend. Until the housing crash, credit became excessively easy. We could have it all immediately and so we learned a life of instant, material gratification. We embraced consumerism. It made sense. We had to keep spending to keep the economic house of cards standing; although most of us just did what the commercials and marketers told us to do.

At ALOL, we hope to promote a healthier attitude to life and money. You should not have to spend to enjoy time as a society. There are families and relationships. We know that life costs money, but good living does not have to enslave you to debt. We encourage you to post your money saving tips and financial strategies here. Your wisdom will benefit your fellow Americans and make our country stronger as a whole.