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Tuesday, July 1, 2008

Is there anybody out there?

That highly touted economic stimulus check came in the mail today, amid a sea of rising food and energy costs and a bleak economic environment.

Those elements mean that for many Americans, including me, the check will be deposited directly into a bank account for use at a later date, for rent, gas, food, or utilities.

That is definitely not what congressional legislators had in mind when they moved swiftly to provide these checks to the general populace.

But a bad economy, a weak dollar, low interest rates, and rising gasoline and energy costs mean that the everyday people who make up the majority of the population and whose spending forms the backbone of this nation’s economy just don’t have the dollars for spending on consumer items that they used to have.

The U.S. Department of Labor’s inflation calculator shows that inflation has increased costs nearly 5 percent over the last calendar year.

Whatever cost $100 in July of 2007 now costs somewhere around $105.

But that comes at a time when few employees have seen a cost of living increase of a similar magnitude. Many people haven’t gotten any raise at all and are forced to deal with wage freezes stemming from the hard financial times being experienced by most American employers.

The current era remains one where the value of real wages for production and non-supervisory employees has remained stagnant, hovering around levels first attained around 1974. But the wealthy and well off have seen exponential increases in income.

The ratio of compensation for Chief Executive Officers in major companies to average worker’s pay has gone from 24 to 1 in 1965 to 262 to 1 today, according to the an analysis of Wall Street Journal statistics done by the Economic Policy Institute.

Governments, both locally and nationally, need to do everything in their power to reduce the impact on everyday Americans and shore up the welfare of the average family and the average workers.

If they don’t, this country and probably the world face an economic crisis of grand proportions and a permanent change in the way of life for everyone, including the super rich.

If this means more regulation of energy companies and speculators – who seem to share most of the blame for the ballooning cost of oil – then fine, do it. If it means slashing the size of government in a drastic manner to reduce taxes and free up more disposable income, fine.

It most definitely means a move towards greater energy conservation and a greater emphasis on Smart Growth. Pushing that kind of planning agenda could benefit from greater government incentives for moving to urban areas.

There people can live a less gasoline-dependent life than the suburbs, where nearly every activity requires a gasoline-draining trip out of a cookie-cutter neighborhood to a strip mall somewhere else in suburbia.

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