The Great Correction

– “Wow…it’s amazing how many Spanish-speaking people there are in this area…”

The one that we find most striking – after being away from the US for 15 years – is how the Hispanic population has taken over.

The woman who cleans our office speaks Spanish and little English.  So does the woman who cleans our house.  And the gardener.  And the fellow who shovels out the driveway when it snows.  And the busboy in the restaurant where we have lunch.

And the maintenance man.  Our landlord explained:

“Eusebio came here from Peru.  He lived at Macho Pichu.  He walked here.  But he’s been here 10 years.  And he’s great.  Always ready to work.  Smart.  Figures things out.  And always nice to work with.  He charges $150 a day.  Not bad really.”

On our drive to work, we put on Spanish-language radio: CNN en Espagnol.  We can only understand about half of what is said.  But we’re learning…

Jules, 22, rode along with us in the car…

“It’s amazing.  Those people are everywhere.  And you know something, they give me hope for the future.  They come here.  They work hard.  And as long as they stay outside of the official status…that is, as long as they’re illegal immigrants, everything works well.  Because they can’t go on welfare, I guess.   And they can’t vote themselves special programs and benefits.  They have to work for a living.  And they work hard.

“There’s some movement in Congress, I think, to change the immigration laws so that these illegal immigrants would be treated a full citizens.  What a mistake that would be.  Pretty soon, they’d be as big a burden on the system as native-born citizens are.  That’s the reason we can’t compete in the world…  We have to carry too many retired people…and too many people on welfare…and too many chiselers getting a check from the government for not really doing anything…

“The country feels old and worn out…at least compared to India.  But these Hispanics are something else.  They’re young.  And they’re not yet ruined by the system.  I mean, they’re not yet leeches…”

Jules explains how to save the US from decline…below…

But first, let’s turn to a related matter.

(Bloomberg) – “Americans are down on the economy and the markets even as stocks and growth indicators are up.

“By an almost 2-to-1 margin Americans believe the economy has worsened rather than improved during the past year, according to a Bloomberg National Poll conducted March 19-22. Among those who own stocks, bonds or mutual funds, only three of 10 people say the value of their portfolio has risen since a year ago.

“During that period, a bull market has driven up the benchmark Standard & Poor’s 500 Index more than 73 percent since its low on March 9, 2009. The economy grew at a 5.9 percent annual pace during last year’s fourth quarter.”

What’s going on?  The economy is doing well (the last quarter showed a 5% + growth…).  Investors are making money.   Why all the long faces?

That’s the problem with a zombie economy.  It walks.  It talks.  But it still sucks the blood out of the living.

People at the top are protected.  They’ve got their sweetheart deals with the feds.  They’ve got their bailouts…and their bonuses.  Heck, we’re not complaining.  Here at the Daily Reckoning, they pay us enough to keep the table set and the liquor cabinet full.  What more could we ask for?

But the poor man on the street is the one who feels the pain.  The Great Correction is not just an economist’s abstraction.  It’s everyday life.  The Bloomberg report continues:

“Barely one-in-three Americans say the country is on the right track. Fewer than one in 10 say they believe the economy will be strong again within a year. Just 4 percent of Americans who cut back on spending during the recession now say they are confident enough to open their wallets, according to the poll, which has a margin of error of plus or minus 3.1 percentage points.

“Unemployment in February was 9.7 percent. Payrolls in the U.S. have dropped every month except one since December 2007. Economists expect job growth to turn around in March, with a median forecast that payrolls will rise by 192,000.

“Poll respondents rate persistently high unemployment the greatest threat to the economy over the next two years, with 75 percent calling it a high threat. Chronically high budget deficits are cited as a high threat by 70 percent, followed by homeowners who can’t pay their mortgages, which is cited by 58 percent. Higher taxes are deemed a high threat by 57 percent.

“Nine of 10 Americans believe that cutting the deficit, which is projected to reach a record $1.5 trillion this year, will require sacrifices from middle-class Americans. Still, when asked about a range of potential tax increases and spending cuts to address the problem, the large majorities of Americans favor tax increases that only affect the wealthy.”


Bill Bonner,
for The Daily Reckoning