Next stop, rock bottom

Wall Street is abuzz with “positive news”, such as word that the economy has lost fewer jobs than expected. The reality for most Americans is less upbeat. While the stock market rises, falls and rises once again, bringing fortunes to those wealthy enough to be heavily invested, times get tougher and tougher for the rest us.

Gas prices are holding steady just shy of $4 per gallon with an increase expected as summer arrives, and as frequent commenter Doc Hopper noted, even removing the federal gas tax completely for the summer would likely only put about $40 into each of our pockets. In fact it’s only likely to help the gas companies. The cost of food is also skyrocketing and with the average American making negative savings, many Americans are sinking like rocks.

We are seeing evidence of just how bad things are getting on the internet. Donations to the Salvation Army are down 20% during the first months of the year. Perhaps this is a sign that people are holding onto their things and not donating to charity. Not so. It seems that people are still getting rid of their stuff, but they’re no longer giving it away.

At Craigslist, which has become a kind of online flea market for the world, the number of for-sale listings has soared 70 percent since last July. In March, the number of listings more than doubled to almost 15 million from the year-ago period.Craigslist CEO Jeff Buckmaster acknowledged the increasing popularity of selling all sort of items on the Web, but said the rate of growth is “moving above the usual trend line.” He said he was amazed at the desperate tone in some ads.

People who once were able to donate the goods they no longer wanted or needed, now are selling even what they do want to get through tough times. This is both evidence of how hard things are right now on middle class families but it’s also a warning about how bad things are going to get for the poorest among us. We have sheared off the one lifeline left for the poor, now that Welfare and many other social programs have been all but eliminated.

In Daleville, Ala., Ellona Bateman-Lee has turned to eBay and flea markets to empty her three-bedroom mobile home of DVDs, VCRs, stereos and televisions.She said she needs the cash to help pay for soaring food and utility bills and mounting health care expenses since her husband, Bob, suffered an electric shock on the job as a dump truck driver in 2006 and is now disabled.

Among her most painful sales: her grandmother’s teakettle. She sold it for $6 on eBay.

“My grandmother raised me, so it hurt,” she said. “We’ve had bouts here and there, but we always got by. This time it’s different.”

Economists say it is difficult to compare the selling trend with other tough times because the Internet, only in wide use since the mid-1990s, has made it much easier to unload goods than, say, at pawn shops.

But clearly, cash-strapped people are selling their belongings at bargain prices, with a flood of listings for secondhand cars, clothing and furniture hitting the market in recent months, particularly since January.

Think for a moment about what is says about the economic state of a family when they feel forced to sell a family heirloom for $6 to pay for gas. We are talking about desperation already. Americans have little to no savings any more, but we do tend of have objects of value in our homes. Unfortunately for many families what they own is their life savings. Once those items have been sold there is nothing left to dip into.

Imagine that desperation when there is nothing left to sell. Once the TV is gone and the DVDs, the microwave and the knickknacks, there is nothing left but the realization that there is less coming in than needs to go out. We would be wise to pay attention to this trend.