Thursday, April 10, 2008

Who's Right About the Recession?

So who is right? Are we in a recession or is it a figment of the Republican haters imagination? Can it be both?

Maxed Out Mama has laid out a compelling arguments for the last nine months that the economy is in trouble. My 401K would support that notion. The New Jersey housing market would support that notion. The Michigan jobs market would definitely support that notion. Houston? Is there a recession her? Not so much, but people do seem to be tightening up on their discretionary spending.

Now, The Anchoress makes this point:

It’s very tiresome, isn’t it? The agendas and double-standards of the press and the willingness of the American people to accept superficial analysis and headlines. Yes, things are more expensive right now, mostly because of oil prices and the soaring food prices that are part-and-parcel of the enviro-hysteria that has America held-hostage to foreign oil (rather than independently supplied by her own resources) and is content to starve the world to burn dubiously “clean” bio fuels. I am at a loss to understand - and a little worried by - America’s willingness to be led about by the nose on these issues.

And I am coming concerned about how easily some Americans digest rank antisemitism without discomfort. That’s chilling.

Many Americans - seemingly more and more - are so busy entertaining themselves - with their flip videos, ear-buds, increasingly balkanized personal lives - that they don’t really care about the details; they just wants to plug in, tune out and (increasingly) let whoever they assign to be “Mom & Dad” in the government take care of them while they stay in their rooms, chat online and try to do as little around the house as they can.

Ouch. But you know what? She's right. That's why you guys get an economy post weekly whether you want it or not. The world is interconnected. What happens in Japan matters to us here and vice versa. Economics drive politics which cause wars or peace. So, to be ignorant and plugged in but tuned out about the truth of the numbers and policies that cause them is to be utterly unaware not only about today but the future.

The network news is not giving unbiased information. A person must have the curiosity and desire to know more. But people are so busy and distracted, they don't have the time or inclination to carve out the time to know more.

There is a real sense that the government knows everything, sees everything and will solve everything--or they should solve everything. This takes the power from the people which suits the elite political class, the academics and the media just fine. A guy who opines on "hope" and "change" has legs because the message feels good. His underlying policies will rob a person of his money, and therefore, his autonomy. So economics matters. He knows that, which is why he'd like to control it.

I don't think people realize the full extent to which their lives are controlled. My in-laws in New York cannot make certain choices, simply cannot do it, because they cannot afford them. So much of their money goes to the government--federal, state, city, county, village and on and on--and they have so little money left over, that their choices are constricted and determined. So yes, the grocery and gas prices affect them. Their anxiety increases because what little they have to spare is eaten up. And, oh, by the way, Barack Obama considers them "rich" and their tax bills will go up with him in office.

So, it's worthwhile to pay attention. It's worthwhile to pick through the news and prove for yourself whats true or not. The Anchoress is worried. Maxed Out Mama is worried. They are paying attention.


Anonymous said...

You are absolutely right. I don't normally follow politics or world events that much. However with the economy in the crapper, my spouse being laid off, gas prices through the roof, etc., I have decided to take notice.

Anonymous said...

Economics have changed, the stock market does not yield to the old historic graphs and while the dollar loses value, we continue to live in hope that stocks will go up. GE survived the crash of the 30's and the 80's maybe we could learn something from studying their history. But history has changed and anit trust laws have disipated and corporations have grown very large, controllng the prices that we pay.

What happening in the 1930's won't happen again, because the world has gone out of our backyard, out of our city and out of our states it has gone global. We wanted beautiful cities, not factories, poluted air and nepotisim, we wanted education and to move up the ladder to success.

Corporations have become larger and politics is influenced by their money. A college student may owe more than you or I did on our last home, when they graduate, only to find out the America has made plans to bring nurses, teachers and engineers to America, because there is a shortage of qualified people.

In Arizona a primary school teacher may earn $33,500 for the first two intern years (will student loans of $80-100,000). Often they spend their own money on some school supplies because the schools in the areas where they will do their internship are the poorer schools.

We loved the idea of the Lottery, all that money going to our schools, but then the Federal Government withdrew their support and who monitors the profits from the Lottery? Multi-state jackpots, that must be confusing. I don't buy scrathchers anymore, because I only win another ticket or maybe $2.00. But I do participate in the company powerball when the jackpot gets big. What if you were one of the people that did not particpate in that last lottery, where 9 out of 11 employees won the jackpot. Wow, at least you might have a pormotion.

I like Maxed out Mama,s analagy, it is so right, we all look at our 401K and wonder when the stock market will stabalize. Well, I believe our analyst cannot predict this market, it has broken all the rules and America's value of the dollar is down, so bonds are not even safe.

Meanwhile, miss a payment on that credit card and watch your interest shoot to 29.9%. Wow, isn't the bank making some money on that? I remember writing a check after 3PM on Friday knowing it would not get to the bank until Monday. Now, the bank put a 7-day hold on our tax return, because of suspicious activity. And now when you deposit a check, the money is gone that instant from your account, but it is not always immediatley applied to the bill or credited to the other person's account. What used to be frowned upon for us to do, the bank is doing three fold. Who can you complain to, there is no more usery tax (cap) and really you must be nice to your bank or quietly close that account and open it at your nearest neighborhood bank, only to find out later that they have been purchased by the very bank you left. Yes, we must be on time and we must obey the rules...Do you read that tiny print, bout 8-pages that comes in the mail and addresses changes to your bank accounts?

After six months of payments on my second mortgage, and the balance did not go down and I did not receive a statement, I went to my local bank. I discovered they had placed assurance on my loan and it was 10% of my payment, it did not show though as a fee, it was incorporated into the payment structure and I did not even know I was only reducing my balance by $5.00 a month. I went in several times and was told because I chose to have it taken directly from my checking, a paper statement was not available, but a quarterly one was. But I had never received one. I had to ask directly if they had me signed up for assurance before I found out why the loan was not amortizing as originally planned. They could not locate the form, after several visits they located the form. Imagine that, I did not have a copy of that form in my paperwork, I had a form that stated "no" I did not want assurance. Now I could not just cancel, we had to explain why and my husband had to come down to sign the request to cancel. Oh did I want to protest? If I did they could not cancel the assurance, it would have to be settled in court. I ate the $350.00. I am made, but everyone that works at that bank is like you and me, just doing their job. I will work hard to pay extra every month to pay that balance down, after all some day I would like to own my house.

My taxes state that my house went up in value in 2007, wo they are higher for 2008. My property value decreased about $60,000, but my taxes will not be dropping, at this time. After all Arizona is the fifth largest growing state and it has a deficit. Politics, gee could it have anything to do with the new Hockey Arena or the Football Statium?

The Air Force is consolidating their contracting to Randolph Texas, taking jobs from Luke AFB, Davis Mothum; yet isn't McCain running for President? Hmmmm!

It happened in California, but they decided to raise taxes 2% each year and frankly I do not know if they are stopping the 2% increase with the drop in real estate values and lack of available lending. Because almost every loan in Californis is a jumbo loan. But I do remember when CA trippled their Personal Property Taxes on Cars and RV's and Arnold, good to his word corrected that and everyone got a refund.

My state is having growing pains along with the rest of the country, it is almost like a double wammy. But it is a lesson for all of us, plan, budget, create a savings and if at all possible create a living trust to protect your assets. That is what the wealthy do, we can learn from them.

It is time for us to think before we spend money, plan our budget, save for the future and plan for the worst, not look at the DOW and the NAS for those arrows to point up. We have a deficit that will need to be paid back, so while it was necessary for the government to pump money into financial institutions (institutions that house your retirement funds, mutual funds, etc.) it was also time for the lender to show a softer side and maybe assist the borrower. But, it is our fault we have had so many years of prosperity, that it is all we knew, until about 3-years ago, when companies reduced raises or simply did not give any raises, stopped matching funds for retirement and began to streamline their staffing, doing it seamlessly, through attrition, because technology had provided a way for business to function with less manpower.

Does any of this sound familiar? while all this is happening, in my state ASU raised the cost of education 425% in two years. Do you think education improved, more teachers, larger camput, better dorms? No, but ASU ownes profitable businesses and like Enron they have highly paid CEOs and Administrative staff. A co worker's daughter is $100,000 in debt, student loans 8.5% and her first job pays $33,500 and she must do a two year internship teaching elimentary school before she can compete for other teaching jobs. But I just read in a financial magazine that America has a shortage of Teachers, Nurses and Doctors or Engineers and that they plan to work with ICE (INS) to import educated professionals from other countries. This is also true about some of our larger construction companies. But 2009 has already met its quota of 66,000 legal immigrants (work visa's, not immigrants that want to become citizens) so their money will be sent home, most of it, but I believe they will pay taxes.

In Arizona every employee must now complete an I-9 which has to be e-verified withing 3-working days. Yes, you and I, if we get a new job have to prove we are US Citizens. On this form is your SS#, your birth date, your mothers maiden name and other personal information. The company e-mails this information to a employee of the state, who verifies that the SS# has been issued; thus it hs been e-verified. Now the company holds on to this form, in an office, in a cabinet, and at some point if you quit it will be destroyed. Will it be shredded, well the law says yes, but now look at how many people have access to your information. So maybe I should get that assurance on my loan for 10%, which by the way only covers loss of limb, temporary illness, the premiere covers death and I believe that is 18%. So far there is no insurance for identity theft. But watch out.

It is time to read the fine print and to be responsible, it is also time to let your lawmakers know how much these lack of regulations affect you and your pocket book.

The American Dream is coming back to the days of old, low wages, family members working to save the home, a college education that will take most graduates 15-20 years to pay off. Family life will not start at 18 or 24 and it will never be as carefree as our childhood was; but it will be good because we are learning by our mistakes, the public, the politicians and the corporations.

If you are a democrat you may know there are few radio stations that get as wild as O'Rielly and one of them "Air America" was recently purchased by the other party, now for them that is smart, because we believe what we hear and see on radio and TV. NPR has taken on corporate sponsors and now must share time for both parties, that is public radio, which used to be where we could go listen to "other stuff." I am a common sense individual and when my budget is affected, my son unemployed, my daughter (an Engineer) 4-years without a raise, I must say we are in a recession and what are we going to do about it? Maybe we will not become so obese, because we will not purchase as much food. Maybe we will pull a tooth as opposed to doing a root canal, a implant or bridge that can easily cost as much as a car. We will have to learn to cut back and prepare for the crunch, it is OK we can do it, our parents or grandparents did and they did just fine.

Whoever wins the political race will have the largest deficit in history and will have to make unpopular choices. This President will not be popular because their will be tough decisions that will have to be made. There are alot of issues that have become complex, water that has not been tested, we are going global and we our building a fence? Maybe not, maybe so, but then didn't we just tear down a wall when Reagan was President? We are innovative and there will be a resolve, but like raising children it looks like the school of hard knocks.

I would not want to live anywhere else, I love America and I have always voted, but now my children vote because they are being affected and that is good, that is how it should be.

Anonymous said...

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