Saturday, February 19, 2011

IS THE END NEAR?

Dear Crabby:

I don't get it. I keep hearing the economy's recovering but I've been unemployed for nearly 18 months and I don't see it. In fact, I think things are getting much worse. What do you think?

Joe in Detroit

Dear Average Guy with Concerns:

Claiming the recession is over is irresponsible! It's not, nor is it likely to be for many months (or even years) to follow. However, this isn't what we hear from our politicians and news outlets.

Politicos who - let's be honest - have more money than they know what to do with - are unconcerned about what's happening to the average person. Sure, they'll tell you that they care.

After all, they want your vote!

But if our elected officials truly had our best interests at heart then they would have never allowed the current U.S. deficit to balloon into the trillions without first reading the bill.

It's even more disheartening when I hear misguided quotes from the likes of Nancy Pelosi who claims that the country's economy is actually better off when more people are unemployed and collecting food stamps.

Is she kidding?

Apparently not. After all, she really said that! We must therefore also assume that she really means it! But enough on the misguided ranting of politicians. After all, what should you expect from a pig but a grunt?

So, what about polls, data, musings and speculations from economists and other 'legitimate' sources, and all those legitimate statistics compiled by governmental institutions? Are they not to be trusted?

Well, national stats have not been particularly useful in critiquing the scope of economic fallout. Consider that the current unemployment stat for the U.S. suggests that unemployment fell from 10 to 9 percent since January of 2011.

Did it really?

Or are the stats being fudged to project an national unemployment rate of 8 percent by the time Obama starts his second run for the White House?

Sure, according to the theoretical data unemployment fell. That's because unemployment claims that were active for more than two years since the recession began have since run out.

Just remember: People who are no longer collecting benefits and those who still have not found work but have given up on trying are NOT COUNTED by as part of the national unemployment census! If they were, unemployment figures would be hovering somewhere around 18 to 20 percent. That's a real stat you can bank on!

Meanwhile, news outlets will point to a rising Dow Jones and say that we're back on track. To hear the media tell it, we've weathered the low point of the recession with minor casualties and are now on the edge of an economic recovery. Well, don't you believe it.

Are investors better off in 2011 than they were in 2008?

Absolutely. No question about it. But the Dow doesn't reflect what real people with real job loss and no investments in the Dow are going through at ground level. Therefore, the Dow shouldn't be the barometer for gauging how well off the overall economic outlook is for the immediate future.

Also, given the volatility of stocks in recent months it's not at all unlikely that they could just as easily plummet as soar.

Finally, and this is the stat that leaves me cold and clammy at night: the U.S. is printing money to pay for its monetary loans throughout the world. The U.S. government has, in effect, confused borrowing money with attaining and maintaining prosperity - a fiscal diplomacy that has painted the American economy into a corner.

It's a trap. At present the U.S. is the only country legally authorized and entitled to print its own money to dig itself out of this financial quagmire.

That's fine and dandy when the crisis is short lived. But this current economic debacle shows no signs of improving. Worse, the country is mortgaged so top heavy to Chinese interests that all China has to do to effectively take over the U.S. from an economic standpoint is to simply pick up the phone and call in their loans at the Obama White House.

End of discussion.

End of America.

So, what's the solution?

Well, that's too simple a question for a very complex problem. I'm no economist, but it surely isn't to keep increasing government spending at its current rate, as the Obama White House seems to be doing with a 'to hell with it' attitude that is crippling the U.S. for decades to come and rotting its own entrepreneurial spirit for investment and economic growth like a tooth cavity, from the inside out.

Printing more money isn't the answer either because too much currency is just as bad as too little. 'Too much' and the U.S. dollar loses its supremacy as a currency of international trade. The countries don't accept it as legitimate money to buy and sell things with around the world. Yhink it won't happen? It's already happening in certain parts of the world.

At ground level - where most of us reside - the U.S. has quickly become a very scary place to work and raise a family.

Gas prices are soaring.

Food and cotton prices are rising.

The number of jobs being created is grossly disproportionate to the amount that have been lost in the private sector - probably for all time.

Salaries are dropping. Cost of living is going up. The housing market is in the toilet.

Personal and business bankruptcies and foreclosures have become a daily occurrence.

No one is secure in the career they're in and hardly anyone is hiring at a rate of pay that would make life not simply sustainable, but livable in the ways that the constitution describes: "life, liberty and the pursuit of happiness."

Will it get better?

Arguably, yes. After all, there is a natural ebb and flow to the evolution of a country. But the U.S. has not been in such an economic freefall since the Great Depression and I, for one, do not believe it's going to come back either as quickly or even to the level it was back in the 1980s any time soon.

People are going to have to learn to live with less.

That's been an Obama-ism since the early part of his campaign when he suggested that we can't simply eat and drink as much as we want or keep our homes as cool as we would prefer.

Since Obama's arrival in the White House his government spending has managed to eclipse that of virtually all other Presidents that have gone before him! The sad reality is that that his prophecy of 'belt tightening' - while hardly applying to either Obama or the U.S. government - is an edict coming true for millions each day.

Far be it from me to depress you with the facts, but I've always been of the opinion and mindset that if there's an elephant in the room someone should follow it with a bag of peanuts and a really big pooper scooper instead of claiming to the crowd of onlookers that no such beast has even entered the room yet!

To ignore the situation any further one need only be the jackass.

Buck up, Joe, but expect hard times. They are coming.

yours truly,

the Crabby Critic

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