I wanted to post the annual numbers for FDCPA complaint from 2011, the most recent year we have compiled data, because it gives a good look at the scope of nature of the collection industry's consumer abuses. (Again) I attempted to delve thoroughly into the meaning of these statistics and (again) I found my analysis hindered rather than illuminated. I submit the following chart -- sheepishly -- without comment:
The stock market is a boom and crash creature. The fact that investment and stock value climb upward and then quickly adjust downward is not a failing of the market, or a failing by investors or money handlers. It is the nature of mass investment. With this incontrovertible law of monetary physics in mind, let's take a look at the current state of the stock market.
America teetered on the precipice of default more than once in the last two years, a first in the history of American bond issuing. As a direct result, the country's credit rating was downgraded by the rating agencies. The world is still reeling from a series of revolutions across the Arab world, most of which are ongoing in some form or another. Meanwhile, Austerity continues to exacerbate the Euro crisis, driving youth unemployment in Spain, Greece, Ireland, and elsewhere into the 50% range. The divide between the rich and the rest worldwide is yawning to record levels, with the wealthy coming out of the 2008 Crash several times better than they went in and the median level of income stagnating in some places and falling in others. Remember the Sequester? The $1 trillion spending cuts package devised by Congress to be so awful that it would have to motivate a budget compromise, that would enact essentially random, across-the-board cuts to all federal spending? It went into effect in March with little public discussion of correcting it.
There we have it: a prolonged global recession yielding deep political and economic instability as meaningful recovery is hamstrung by inept government oversight. So naturally the Dow broke 16,000 for the first time in history this morning.
How could this be? Because the market is riding an epic bubble. Because investors are pushing stocks, a skin-deep measure of company value, well beyond any price that could be considered rational. Because the simple logic that you buy low and sell high is easy to circumvent when it's convenient. Because, as Forbes put it last month in an article titled Why Stocks Are Undoubtedly Experiencing A Massive Bubble: "investors and becoming conditioned to ignore risks." And because, as legendary hedge fund manager Jeremy Grantham recently wrote in a piece warning of an impending pop, investors "must never, ever be wrong on [their] own . . . this creates herding, or momentum, which drives prices far above or far below fair price."
What does this mean for you, the Layman Law Blog Reader? If you have money in the market it's probably time to cash out. If you don't, make sure you have a good grip on your pants.
I will risk stating the abundantly obvious: as an attorney that sues debt collectors I meet a lot of people having problems with debt. There are commons threads between them-- medical issues, homes underwater-- but one of the strongest links is unemployment-- either a brief stint that derailed their finances or a prolonged period of it.
Any self-respecting economist will tell you that some dearth of employment is baked in our economic model. And as a society we've decided to provide certain safeties for people who fall into this inevitability-- unemployment benefits, SNAP benefits, etc. These safeties ease the pressure and anxiety that accompanies unemployment without relieving it. Gawker has been running an excellent series of dialogues with people struggling to find work in an employment market too small for everyone that I highly recommend reading for an eye-level view of the struggle. The series highlights one of the great paradoxes of unemployment-- that the longer you are unemployed, the harder it is to reenter the market.
So what percentage of able-bodied adults cannot find work? According to the BLS: 7.3%. This is the number public discourse leans on in its discussion of unemployment, and for purposes of public discourse 7.3% is low enough to evade note. Thus unemployment is rarely a topic of mainstream political or economic conversation.
But 7.3% is a very technical count. It does not include the "underemployed" (folks working part-time (often service/retail/etc.) who are actively seeking full-time work in their field of expertise), and it does not count the long-term unemployed who have fallen into the aforementioned paradox and grew so discouraged that they dropped out of the market entirely. With these people counted the number jumps to 14.3% (as of this summer), and unlike the BLS number it is not slowly receding. Why exclude them from the count? I don't want to say political expediency... so I'll just say that I don't want to say it and leave it at that.
It's oft-repeated that our long economic recovery doesn't really feel like a recovery. The fudged BLS unemployment number hides a big reason why.
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