In December alone, 640,000 jobs reportedly disappeared. This number only slightly inflated by all the elves laid off at North Pole Enterprises on the 26th. There’s a secret reason for these losses, never mentioned in the media.
When I was a kid, you got toys if you were a good boy, and only a lump of coal if you were bad.
Our politicians have always enjoyed playing at being Santa Claus, but about the middle of 2008, they decided that should be their full-time job. They quickly filled up their sack with $700 billion of gifts and just as quickly emptied it out. President Obama promises to re-fill it with another $800-billion or $1-trillion or some unknown, larger amount. The number seems no longer to matter.
But now Santa is giving out goodies to all the bad boys and girls, and only lumps of coal to the good ones. Santa has been kidnapped and replaced with an evil twin Santa who’s working all year. Overtime.
For example, there are lots of bad boys and girls who lied on mortgage applications, who knowingly bought homes far more expensive than their incomes justified, who re-financed and re-financed in order to extract cash to buy themselves toys, and now they can’t pay their mortgages. There are also a lot more good boys and girls who’ve made responsible decisions, worked two jobs, paid their mortgages on time and even paid extra to pay them off sooner and create equity in their homes.
Santa’s promising those good boys and girls lumps of coal. For the bad boys and girls, he promises to re-write their mortgages, wipe out lots of interest they owe and give them lower interest and lower payments.
Most recently, Santa has promised to let the bankruptcy courts even wipe away principal owed, so no sane individual will ever again invest in single family homes and provide seller financing for real fear of having Santa’s mob just confiscate their property value and hand it to bad boys and girls. (Incidentally, seller financing, based on investors’ certainty they will either get paid the agreed-on price in the contract or be able to foreclose, fuels the real estate business and makes it possible for hundreds of thousands of people to buy homes who can’t meet stricter bank mortgage requirements. Take this out of the equation and you have mass fire sale by exiting investors, no investors coming in, and a bigger real estate crash than the present one.)
Then there are lots of bad boys and girls who lied about the financial health of their big companies and big banks and big institutions. They made these companies look like good investments to stockholders. In fact, they were houses of cards, totally dependent on being able to get more and more debt just to meet the demands of the debt they already had. They were paying interest to lenders, dividends to investors and payrolls and gigantic bonuses to their executives with the money they were borrowing or taking in from new lenders and investors. They were all Bernie Madoff’s, but they dressed up their Ponzi schemes with automobile factories or insurance companies in glittering high-rise buildings or banks with their names on stadiums. They were assisted by other bad boys and girls – sometimes called “criminal conspirators” – like those in Congress who got lots of money from them and looked the other way while they ran their schemes, or the regulators who didn’t bother enforcing regulations. Did Santa give them all orange jumpsuits and lumps of coal for Christmas? No. He gave them $700-billion dollars, and with a wink and a nod and a cheery “Ho-ho-ho,” he let it be known there’s a lot more where that came from.
But what of all the good little boys and girls who work very hard running their own small businesses or who have built up mid-sized companies, and pay their bills, and pay their taxes, and have real income – not just debt and mountainous losses? What gifts did they get? Just lumps of coal.
And that’s the secret reason – the reason the media, in all its coverage of job losses, never talks about – that all these jobs are disappearing.
It’s not just “the economy” or the recession or sagging consumer spending that are costing jobs. The secret reason is that all the good little boys and girls running all those small businesses and small companies that provide most of the jobs are mad at only getting lumps of coal while failures, liars, criminals, stupid and slothful deadbeats get gifts. So they are giving themselves gifts and handing out their own lumps of coal. They are closing their least profitable shops, eliminating their least profitable services, even firing their least profitable customers. They’re cutting size, cutting hours, cutting back, thus eliminating some of their biggest expense – payroll – and keeping that money for themselves. They are deliberately shrinking their businesses.
And just as fast as the evil Santa creates new gifts for the undeserving, they will keep shrinking the most necessary job-providing foundation of the economy, so the economy itself will keep shrinking. Santa’s stimulus will all disappear into bottomless sinkholes, no matter how much money the elves print. It was, after all, dumb debt that got us into this mess. More dumb debt won’t get us out.
Ho, ho, ho. Who’s the joke on? Everybody.
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