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Declining incomes plus frugal shoppers equals a whole new ball game for retailers.
Are we starting to see some kind of paradigm shift in the way people earn and spend? I'm far from sure, but in the last week and a half, I've seen a few signs that's something's afoot. Median household income has evidently declined since the end of the recession, while consumers have reduced their spending — and may not increase it any time soon.
Reuters Felix Salmon offers a quick summary of a some U.S. labor data data now being processed by Sentier Research. You can easily see what the really troubling thing is: "In dollar terms, median household income is now $49,909, down $3,609 — or 6.7% — in the two years since the recession ended. It was as high as $55,309 in December 2007, when the recession began."
This is why the "recovery" feels like anything but. Meanwhile, the Wall Street Journal took a look at the new frontier of frugality:
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Calif. Republica Rep. Darrell Issa has some questions for Energy secretary Steven Chu.
California's own Darrell Issa has started asking some tough questions in the aftermath of the Solyndra bankruptcy and the ensuing fracas with the Department of Energy's loan-guarantee program. This is from Jake Tapper at ABCNews:
Issa…chair of the House Committee on Oversight and Government on October 7 wrote to Energy Secretary Dr. Steven Chu to see just what other problematic loans might exist.
Specifically, Issa is seeking “additional information regarding the loans approved on the final day of the program,” ones made to First Solar Inc, SunPower Corp., and ProLogis Inc.
“Did DOE have an independent audit of First Solar, SunPower, or ProLogis conducted prior to finalizing loan guarantees for these companies on September 30, 2011?” Issa asked in the letter.”Does DOE have any ongoing concerns about the financial viability of First Solar, SunPower, or ProLogis? In their respective loan applications, did First Solar, SunPower, or ProLogis disclose their cash reserves?”
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In 2005, Steve Jobs told college grads to never settle. Was this good or bad advice?
Steve Jobs gave a now nearly legendary commencement speech at Stanford in 2005 that has become, for many, the Gettysburg Address of commencement speeches. It's generally regarded as inspiring and direct, if a bit lacking in deep insight. But that's before you read between the lines.
A lot of times, the conversation zeroes in on a core message. As Jobs put it:
You’ve got to find what you love. And that is as true for your work as it is for your lovers. Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle.
Jobs' encouraging words have set off a debate in the blogosphere, summarized at Forbes by Timothy Lee:
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Steve Jobs and his signature turtleneck. You can't get one. Not in black, anyway.
Everybody wants a Steve Jobs turtleneck! Right now, you can get it in any color as long as it ISN'T black. (Business Insider)
Occupy Wall Street is taking action! If you're angry about debit-card fees, take your money out of the big banks: "Together we can ensure that these banking institutions will ALWAYS remember the 5th of November!! If the 99% removes our funds from the major banking institutions on or by this date, we will send a clear message and give the 1% a taste of the fear that we experience every day when we aren't able to pay for our rent, food, medication, utilities, student loans, etc." (CNBC)
Megan McArdle on the chilling threat of no job after college: "No matter how inflated your expectations may have been, it is no joke to have your confidence that you can support yourself ripped away, and replaced with the horrifying realization that you don't really understand what the rules are." (The Atlantic)
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Paul Krugman supports Occupy Wall Street, but he has some ideas about its agenda.
The floodgates have officially opened. New York Times columnist and Nobel-winning economist Paul Krugman has thrown his weight behind Occupy Wall Street (and I'm assuming Occupy LA and Occupy Everywhere Else), endorsing the inchoate anger of the 99%.
Krugman doesn't mince words. The enemy is in his sights, he takes aim, and fires: "What can we say about the protests? First things first: The protesters’ indictment of Wall Street as a destructive force, economically and politically, is completely right."
Krugman is just the latest intellectual personality to lend support to the protesters. Last week, Krugman's fellow Nobel laureate in economics, Joseph Stiglitz, visited Zuccotti Park in lower Manhattan. Former Labor secretary Robert Reich also spoke up for the movement at a conference in Washington this week.