On the Brink of an All-Out Crash
by Jeff Davis
In September it was banks going under. In October it was the stock market collapsing. Now get ready for the third shoe to drop: Mass layoffs leading to possibly the worst unemployment since the Great Depression.
CBS News reports “Mayor Richard M. Daley says the economic woes in Chicago will get much worse, and more local workers could soon be getting pink slips. As CBS 2’s Joanie Lum reports, the news is especially alarming because the discussion concerns not just city jobs, but the private sector. Thus, it seems the City That Works is about to become the city that gets laid off… Mayor Daley says chief executive officers told him huge layoffs will impact the city this month and into the new year. He also says city, county and state governments should be prepared for their revenue to fall dramatically because of the souring economy. In addition, the federal bailout plan is changing, the big three automakers are all warning they could go bankrupt, and lawmakers say if the auto industry goes down, the huge number of jobs lost would cause more house foreclosures.”
The American auto industry has been making ridiculously over-sized and overpriced SUVs as soccer moms competed to see who could own the biggest tank. The profit margin for these whale-sized vehicles was much higher than for economy cars, which is why the US auto companies focused on them, thinking the consumers would never want smaller cars again. The Japanese and Koreans seemed to dominate the more reasonable-sized vehicles with high gas mileage. You’d think at least one American car company would have been prepared for soaring fuel costs and have a super fuel efficient vehicle ready, but they all got caught with their pants down. (more…)