Advertising Economy; Unsustainable!
The following was sent to me by reader Michael Hayes. What Michael has to say is important. It represents the domino effect of a failing economy, a subject that I have written on many times.
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We all need to come to the realization that the world’s most debt ridden society cannot continue to exist on expanding credit. I think Michael has come to that realization and effectively makes that point.
By: Michael Hayes
Hey Mike, One of the major problems I have seen in our economy’s base is the extreme reliance on the advertising dollars.
It seems like advertising supports over half of the economy and, to me at least, is a very fragile entity. When our recession begins (and it probably already has) the advertising budgets will begin to shrink at ever increasing rates.
When we think of all that advertising supports,(newspapers, magazines, radio, all organized sports)almost all entertainment, etc.) when it starts to deflate the effects will be devastating. The impact on newspapers, radio, television and magazines will be crushing. A recession/depression will cut their circulation which diminishes what they can charge for ads.
As the corporations feel the pinch, their ad budgets will shrink at even greater speed which will compound the downward spiral. Wall Street will react in the worst way possible and what might have been “just” a recession will bloom into a full depression.
The average American is totally dependant on entertainment and since ads support most of those venues, there will be a lot of bored and despondent TV, movie, and sports fans out there. I shudder to think what the crime rate will do when this occurs. You can already see crime increasing as our middle class slowly descends into the poor class, shoving the poor out the bottom and into the streets.
When you stop and think about what this mess is going to do to us I start to wonder what its effect on the rest of the world will be. We have been sucking a huge amount of the world’s produce/goods into our economy and when that stops the impact on the global economy is not going to be very pretty.
And still, our “beloved” presidential candidates make no mention of the real problems facing this nation or planet. It is truly amazing how they can sidestep any relevant question put before them. I feel like I am watching Tweedledee and Tweedldumb.
P.S. by Mike Folkerth
In the past few weeks, several of my real estate broker friends have reported reducing their office advertising budgets by 50%. When the fish aren’t biting, why waste bait?
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What you say about the crime rate is very true. Like I said before, we all better get our guns out, buy lots of ammunition, and stock up on the groceries. This is going to get very ugly before it is over.
Rose,
I wish that I could say things are going to take a turn for the better, but I’m afraid that would only be wishful thinking.
We need to act as individuals and become responsible for our own lives while there is still time to do so on our own terms.
Simplicity is a wonderful thing in more ways than one. It allows us to have more free time rather than work to pay the bills for keeping up with the Joneses.
It also allows us time to reflect on why we get up in the morning to begin with. If a person is happy, more money and debt is not going to make you happier. If a person is not happy, it’s probably because of work and debt.
Buying things we don’t need with money we don’t have is not the path to happiness. What say you?
Hey Mike! I have been thinking(Ooch!) even more about what our economy is based on. Wall Street is all about whether or not the corporations, whose stock the market is based on, can correctly predict what their profit/loss will be in the next quarter. They could care less about the quality or quantity of their products. I was always stunned when the different companies I had worked for were so worried about meeting their forecasts and not about their products. I think WalMart was the last company I worked for(1980-1984) that was more worried about what they did quality wise than whether they met forecasts or not. With such lame goals and misguided leadership how can our economy have any idea about where it is and where it is headed? I suppose part of this is due to the fact that we are not really producing much anymore. We have become a nation of service(what a joke, eh?) oriented companies merely shoving foreign made products around this country. I think quality has taken a backseat along with integrity and honor. I remember the communist Asian countries calling us a “paper tiger” back in the 60’s and 70’s. That kind of rings true now It seems our whole economy is based only on paper.
I guess the next big questions are what do we need to do to turn this mess around and whom do we have to “lead” us in doing it? All we hear from the candidates are crickets chirping! Who ya going to call? Have a good week Mike!
Michael,
Paper Tiger is a term I haven’t heard for a while, but certainly is true. One has no further to look than the banks! Bum paper wrapped up with gift paper and resold to a point of dragging down the entire economy.
There is a large wealthy class such as those on Wall Street who are nothing more than professional gamblers. In Chicago at the mercantile exchange, fortunes are made on the hard work of those who produce commodities by those who produce nothing but higher prices.
At some point, the banking system and stock exchange need to be dismantled and more just system of finance take their place.
Education, the untouchable subject, does not always produce favorable results for a society. Higher eduction and particularly MBAs, tends to spawn a self proclaimed elitist class who are very much at home in the banking and stock market rip offs. This too will change as our economy fails.
Michael,
Paper Tiger is a term I haven’t heard for a while, but certainly is true. One has no further to look than the banks! Bum paper wrapped up with gift paper and resold to a point of dragging down the entire economy.
There is a large wealthy class such as those on Wall Street who are nothing more than professional gamblers. In Chicago at the mercantile exchange, fortunes are made on the hard work of those who produce commodities by those who produce nothing but higher prices.
At some point, the banking system and stock exchange need to be dismantled and a more just system of finance take their place.
Education, the untouchable subject, does not always produce favorable results for a society. Higher eduction and particularly MBAs, tends to spawn a self proclaimed elitist class who are very much at home in the banking and stock market rip offs. $500,000 per year and no heavy lifting. This too will change as our economy fails.
Mike, the education system has been one of my sore spots for sometime. The current generation of students/youth would be far better off going to a vocational school than a college. I have known many “college graduates” that would have trouble tying their own shoelaces. The good ole boy clan that helps put the “rich” kids through college and installs them in high paying useless jobs within corporations is the same one that shoved George W. Bush on us.
It is really scary the fortunes that some of these creatures amass just manipulating paperwork. One has to think that alot of things are “fixed” in these creatures favors. Indeed from the “yuppies” on up there seems to be a complete fake society that they live in. A lot of folks in that “society” are really going to be in for a very rude awakening when the bottom completely falls out.
On another note, do you think we can ever get Congress to cancel all foreign aid and those wierd grants for studing the sex life of newts? We will definitely need to cut an awful lot out of the current obese budget Bush and company have written. Have yourself a great week Mike!
I think you may have over estimated the value of the advertising dollar to our economy. Besides the fact that radio, tv, and printed advertising is already in decline due to electronic advertising via the web. Any person, company, organization that has a product or service to sell and knows how to operate a business budgets for promotion of their particular interest. Determine your target market,set your goal, map out your plan, take action.
Hey them breedin newt stories make good pbs stories on a long cold night in the north.
Red
Hey Red! When you consider that the primary, and sometimes only, income that newspapers, radio, magazines, TV, Radio, and the web get comes from advertising it really is not over-estimated. The subscription rates seldom even cover delivery charges for the printed matter. If there was no advertising dollars most of these venues would disappear. And then there are all of the sports agendas that advertising supports. Most major sports figures make far more in their ads than they do in the chosen sport. Look at the names of almost all of the stadiums around the country. I am looking for the Viagra Sports Complex to showup at any time now. It really gets tiring when I hear the announcers say the names of all these stadiums. It sounds like a Nascar driver being interveiwed at a race. I guess I cannot complain too much since my favorite sport(Drag Racing) would not be anywhere near what it is with out ads.
Yeah, those breedin stories do keep PBS, Discovery, and the Learning Channel afloat! Have a godd one Red!