Oh, What A Relief

I feel so much better on this news from CNN:

The Great Recession ended in June 2009, according to the body charged with dating when economic downturns begin and end.

But the news is little comfort to the millions of Americans still out of work, underwater on their mortgages or uncertain about the future.

Yeah, that's a great comfort. I've been "working" in my chosen field the past year, but if I clear more than 15% of what I cleared in 2007, I'll be astonished. I'm employed, but I'm underemployed, and the current political climate wherein business owners lack confidence in the economic recover such that they are not expanding has greatly impacted me. I began looking forward to new budgets for 2011 in February of 2010.

I hope the people on the margins like this are enraged by the news and show up at the polls to punish incumbents. I'm obviously motivated enough without this kick in the pants, but it does feel like insult to injury.

Speaking to a town hall meeting in Washington, President Obama said the announcement about the end of the recession is further proof that steps taken early in his administration, including the economic stimulus package, were the right ones. But he cautioned it does not mean that the economy has recovered.

"Obviously, for the millions of people who are still out of work, people who have seen their home values decline, people who are struggling to pay the bills day to day, [the recession is] still very real for them," he said.

Thanks for the acknowledgment, Prez. Now, if you could send some kind of signal, anything at all, that businesses aren't an ox to be gored, maybe, just maybe, we'll start to see the kind of confidence enter the picture that you thought a "stimulus" package might engender. Alas.

This tells the story on whether or not stimulus was the 'right move'.

Unemployment Images

Now this is positively frightening.



For a cleaner view, follow this link.

Under the Bush Administration, jobs were being lost, and under a full year of Obama's Administration, it has gotten worse. When you read comments that follow graphics like these, the wilfull partisan ignorance is amazing. Mainly, both sides have failed. Pointing fingers at the Rs or Ds yields one response: You're both right. They're at fault.

Dog And Pony Show For Failure

It was mere months ago that Republicans were alarmists. So, what is President Obama's tone? It was mere months ago that President Bush's borrow-and-spend was failed policy. So, why are we to believe it is no longer failed policy?

So, here is Obama in my state, sounding alarmist, and promoting proven failure. From an Indy Star report:

Campaigning for action in the most dire terms, President Barack Obama said Monday that if Congress does not quickly pass an economic stimulus package, the nation will slip into a crisis so deep that “we may be unable to reverse” it.

“We can't afford to wait. We can't wait to see and hope for the best,” Obama said in Elkhart, Ind., a community reeling in job losses during the recession that has defined Obama's young presidency. “We can't posture and bicker and resort to the same failed ideas that got us in into this mess in the first place.”

Sorry- If Congress does pass this badly misnamed 'stimulus', that is when we slip into crisis that we may not be able to reverse. That is when we take Bush's recession and turn it into Obama's depression.

I am not suggesting 'doing nothing', although allowing failing businesses to go under would be good. It would be justice, for one thing. It would punish bad business practices, which would also be good. Rewarding failure with bailouts ensures continued bad business practices.

If you want to stimulate the economy, stop dragging it down with so many taxes. Reduce Federal spending by 25% or more, and stop ALL borrow-and-spend.

But, how about the panic in Obama's rhetoric? Where is the steady voice of Obama The Campaigner?

Recession Economics

When times are tight and money isn't a-flowing from your wallet, would you prefer that your dollar had greater purchasing power, or weaker? Would you prefer that your cost of living increased, or decreased?

With the economic in the tank, government intervention is seen by many as the best way to revive it. One person held as a hero to many for economic turnaround is FDR. One of the tools FDR used to try to revive the economy was inflation. One of the hallmarks of the prosperity of the 1990's under the Clinton Administration and Alan Greenspan's Fed was the very low rate of inflation.

These endless bailouts are going to generate inflation, whether that is the design or not, because the money being doled out doesn't exist. It has to be printed or borrowed, and with our borrowing capacity nearly tapped, it's going to have to be printed- created out of thin air.

Obama is in favor of the bailouts, so by extension, he is in favor of inflation.

Here's an interesting bit of propaganda from 1933, extolling the virtues of inflation, i.e.: the weakening of your purchasing power and the raising of your cost of living.



(h/t: Chris Spangle)

Survivalist Instincts Kicking In

I've found myself doing things to live more simply and more frugally over the past 7-8 months. Business has been down about 60% for me this year, which isn't devastating, thanks to Ame's salary, and thank goodness. Toss that together with an economy that had been slumping badly in my opinion for a couple of years (start with the rash of foreclosures a couple years ago), and it made sense to me to begin to look after some measures that would keep my family secure should it get worse.

Of course, it has gotten worse, but I'm not feeling pinched yet. There were some steps we took:

Pay off debts.

Last year, we knocked out a ton of debt, from old college loans, to all credit card debt, to paying off a car loan early. It wasn't sexy, but it's been fantastic not having those payments hanging over us. We don't use the credit card for anything but convenience or travel, and we haven't carried a balance since. 

Live more simply.

I've actually enjoyed much of this. I went to great lengths to plant a functional garden, raising it up off the surface, within cedar walls. It drains well and has excellent topsoil. It even has a section of sandy soil for the cucumbers. The yields were great, and best of all, the food is delicious. It has been a real pleasure to eat organic carrots and tomatoes. They just burst with flavors lost in the process of shipping food great distances to our tables. 

It wasn't big money saved in the garden up front, but just the process of making more soups and stews with lots of leftovers has meant more meals at home, which is a terrific savings. Plus, Isabel loves cooking with us, which is great fun.

I've looked for places to save money at every turn. Even business travel has been improved by crashing at friends' homes, with the obvious added bonus that I get to enjoy their company. When I do stay at motels, I stay within chains where I get points towards free stays. The Choice Hotels chain is great- reasonable rooms, plenty of promotions for points, easy redemption of free stays. 

Get out of the market.

With the inflation that has been going on, and with the foreclosures, I began sensing that having hard assets was going to be essential. Slowly, I moved the investments to gold. Wow, am I glad I did! I know this is regarded as kook stuff by so many in good times, but it's not so kooky now, is it? I urge my friends to do this now. Get out of the market. It isn't done sinking, because our government isn't done engaging in the problematic behavior that caused the problems in the first place. This bailout is going to mean a lot more inflation. Even if the price of gold doesn't go up any more (it will), the worst you will do is preserve your purchasing power as paper money buys less and less.

Still more to do.

I have been accumulating canned foods for emergency use, but I still don't have a full supply for a minimum three-month period, as I would like. Our house has storage issues, so this is a problem. I need to remove old junk to make the space. I would really love to get a freezer and perhaps even an extra fridge. I used to have the bonus fridge, and it was great, buying things that would keep in the fridge at low prices and storing them.

If we didn't have Ame's relatively recession-proof job (she delivers babies at Methodist Hospital), and we hadn't taken the steps to eliminate debt, I would probably be pretty worried right about now, with my own enterprise suffering. It's amazing to find out that you can still live pretty well even in trying circumstances, so long as the preparation is there. 

If you haven't altered the way you live towards preserving your family's security, I urge you to do it right away. Not like a Chicken Little thing here, but the news is getting worse, and I do expect some shortages in the near future. It will be temporary, no doubt. Hell- the Great Depression was temporary, if you catch my drift.

Not Worried About Short Term Effects

The most irritating comments I hear about the financial crisis are along the lines of 'having to do something', or 'needing to minimize the pain'. I'm seeing through that rhetoric for what it is, and calling it out as dangerous.

Needing to minimize whose pain? I have come to believe that for the President and lawmakers like Barney Frank, John McCain, Barack Obama, Nancy Pelosi, and Dick Lugar, it's all about not having a deep recession happen on their immediate watch. That's exactly the problem. Forestalling what needs to happen only will beget a bigger problem- later.

These bad loans are nearly worthless assets. They have been overvalued for far too long. They should be valued as worthless or nearly worthless. Those who gave out these loans should be losing their asses. Those who took loans they couldn't pay back should be losing their homes. Politicians who encouraged the Federal Reserve to endlessly print money or borrow severly from China and Russia deserve to have a crash happen on their watch. This is actual economic and social justice. Prolonging the necessary means that it will be worse later. Want a depression? Promote a new bailout package.

The market is making correction- as it should. Propping up prices means artificially making things appear to be worth more than they are. That's what Bush, Frank, et al want us to do. This is why I am so pleased that so many members of the House voted against the bailout. It's senseless. It does not have to happen. It is sane that it does not.