A significant new milestone has finally been reached in US economy after decades of effort: Spending Stalls and Businesses Slash U.S. Jobs. After decades of increasing profits by liquidating labor corporate management wizards have begun the final liquidation of their customer base.
As the financial crisis crimps demand for American goods and services, the workers who produce them are losing their jobs by the tens of thousands. Layoffs have arrived in force, like a wrenching second act in the unfolding crisis. In just the last two weeks, the list of companies announcing their intention to cut workers has read like a Who’s Who of corporate America: Merck, Yahoo, General Electric, Xerox, Pratt & Whitney, Goldman Sachs, Whirlpool, Bank of America, Alcoa, Coca-Cola, the Detroit automakers and nearly all the airlines. ...
Employers had tried for months to cut expenses through hiring freezes and by cutting back hours. That has turned out not to be enough, and with earnings down sharply in the third quarter, corporate America has turned to layoffs....
After enduring a long-term decay in worker pay, security and discretionary purchasing power, the economy appears to have entered a grim new positive-feedback phase where things will get worse faster. Rather than the gradual decay to a lower standard of living that we've become used to since the 1970s, this news suggests we should expect an increasingly rapid fall to even lower depths.
For those who've taken calculus, we've passed the critical threshold point where the economy's first derivative is negative and large and the second derivative is also large and negative. For those who haven't, we've gotten to the point where things will be getting worse quicker the worser things get. Its the difference between rolling down a hill and gradually slowing to a stop at the bottom, and falling off a cliff and hurtling faster and ever faster toward the distant canyon floor below.