Tuesday, November 23, 2010

“Economic Blues – The Beat Goes On”

Gregory V. Boulware

The Census Bureau reported that 43.6 million people lived in and or below the poverty level – 14.3% is the latest recording. I believe it’s much worse than that. Getting people back to work while creating a climate for an ailing populace where recovery is the most prominent concern facing our country. This situation is the most paramount topic of debate amongst economists. The ruin is widespread, deep, and vastly profound. The major argument is that it will take many years of growth to recover. But on the other side of their faces they say the good news is “The Great Recession is officially over!” Haven’t you heard the good news? Allow me to reiterate…the professional economists of these United States said, “The recession is officially over!” Now, I ask you, over for whom?

The television and radio programs playback over the airways – and cable and satellite too – many “come and get it” commercials. They say “come on down and buy this new car!” At the time of this scribe, the holiday shopping season once again presents us with gift giving challenges. The merchants and vendors are counting on a spending craze (as they do every year with designated seasons of celebration and money exchange). Their business – their very survival is based upon our ability to spend money – or the ability to charge it. Now I ask you… If half the country is out of work and losing unemployment benefits on a scale of phenomenal proportions – by the millions… How in the world can we afford to buy a new car, shop for and buy presents for the holidays, pay bills, buy food, purchase football tickets (the Philadelphia Eagles have raised their ticket prices by five dollars, with an average price nearing one hundred dollars a pop), and keep a roof over our heads – with NO MONEY? 

The American populace is suffering in the worst financial crisis since the “Great Depression.” It’s simply amazing how someone or some entity is constantly trying to sell you and me something. It doesn’t matter if it’s a service or a product; they want us to buy it. Do they care if you and me have no money? Have you heard the car commercial tell us that we can buy a new car with no money down? Do you remember at the end of the spiel, the quick speaking voice noted the stipulation of the purchase requirement(s)? The cadence is spoken with subtlety – direct and quick, “this message is for well qualified buyers only!” You and me pay for television programs only to be inundated with commercials that we had originally hoped to avoid by hooking up from free TV in the first place. We have come to know there is no such thing as free TV any longer. They are everywhere. They’re on the radio, cable and satellite TV, the Internet, the side and insides of taxicabs, trains and buses. The messages are posted on the outside of these vehicles as well. The messages to buy something are everywhere. They’re in the bus stations, the train stations, the airports, the restaurants, and yes…the rest rooms too. The billboards up and down the highways and bi-ways continuously plaster human brains from everywhere – buy something.

How can we buy something - anything with no money?

I’ve previously written about the mechanisms in place that support the difficult task(s) of acquiring gainful employment with regard to the credit report. The viable candidate selection to job postings are based upon ones credit score and history. That’s right…you can’t get a job unless your credit score is above the high seven hundreds. Is this practice fair? How can a person pay his/her bills with no job or the possibility of getting a job with this barrier in place? Today, people are expected to compete for employment opportunities in a tight job market where the competition is one job to every thousand persons. Am I the only one who realizes the applicant silo is in favor of the employer as opposed to the job seeker? Folks are expected to compete for employment where there isn’t any – to spend money when there isn’t any! The job market and jobs have moved to overseas and south of the border locations. But the good news is…the recession is over.

“A period which economic output shrinks is defined as something much narrower and more precise.” Mr. John Cassidy, a blogger on the New Yorker, expresses the following statement. He began the message by espousing his position with an old saying: “a recession is when your neighbor is out of work, and a depression is when you are out of work.” He further stated, “When professional economics talk about recessions, they mean something much narrower and more precise.” According to the National Income Accounts, output and income both stopped contracting in June 2009. Still don’t get it? That’s when the recession ended.

The view from “The Hill” obviously looks very different from the view on the streets of America. This recession isn’t over for millions of Americans – not by a damn sight! All income level brackets are troubled by this economy’s future. One would think this translates into weak consumer spending and limited investments into businesses. Now we’ve all heard of the big fat bonuses that have been distributed throughout the Wall Street and financial communities, yes? How about the greedy companies that take their businesses out of the country so they can stuff their coffers with total profits that take everything from American workers?

Richard Eskow, a contributing writer on the Huffington Post brings an interesting point to the good news announcement. He wonders, via his posting, if it’s true that a panel of economists actually announced the recession being over. Eskow also expressed another wonder… “If we’re no longer in a crisis or if steps were taken to fix the economy aren’t as urgently needed as they were before.” I say, “Absolutely not!” The situation on the streets has not changed for millions of American People attempting to survive in this terrible economy – we continue to need jobs and a concerted government effort to create them.

The American People need jobs. America, in order to survive, must get its people back to work. Tools must be in place to rein in the runaway bankers who caused this mess in the first place. Their insatiable greed has taken the last piece of bread from the table of the people who built it.

Albeit, many economists don’t expect employment levels to return to above the 5% to 6% level for another three years or more…I think it will take longer – much longer. The Wall Street performance and that of corporations are hoarding more cash than at any other time in American History, according to a Macon, Georgia telegraph. You and me can certainly believe that.

The market economy is based on demand, supply, price, and competition. Supply and demand are two of the basic concepts in economics. These interact with price and competition in a market economy. The economy functions, in part, due to the various groups it contains. The national economy of the U.S. is complex. Economists use a variety of measures to monitor and predict how the nation’s economy is performing. In a world of constant economical change, opportunities arise. Change can also bring and cause major economical problems. It is important to understand the economic factors that influence the lives of people like you and me. It is also just as important to understand the decisions made by businesses and government around the world as well. The politicians seem to understand the situations rather well…they got pay raises and other incentives at our expense didn’t they?

The jest of the matter is economists consider the things that keep us alive. These are considered “needs”; everything else is considered a “want.” But in many cases, mostly all, what starts, as a “want” often becomes a “need.”

Does this next line sound familiar? “I want that, I need that, I have to have it?” It’s a limitless list. Our ability to satisfy the wants is usually limited and in many cases deadly. Debt has many facets and is a potential slave master. In this recession, one must learn to know what is truly needed and learn to abstain and/or separate from that which is not needed. 

You and me by now have probably learned that you can’t have everything you want. No one can have it all – not even the richest person in the world. In fact, the list of things we want is far greater than our ability to satisfy those wants. Economics deal with choices. It includes the choices business and government make as well. Facts also dictate that we cannot have everything we want; we have to make choices. Economic knowledge can help us make the most of limited resources. Think I’m wrong? Growing up poor will teach you economics, excluding the classroom version. The economics of survival, allows one to rebound. A reality check sets the tone. Poverty and/or the loss of everything owned could teach you how to survive in practically any economic environment…if one is strong enough to handle it. Ask any poor person. What do you think would happen to the “fat-cats” if they lost all they owned? Do you think they would jump from the nearest high-rise building window? It’s been done. The Wall Street crash of 1929 caused many folks to jump from the highest windows available to their doom.

Economists profess to analyze the ways individuals, families, businesses, and nations focus on limited resources to satisfy unlimited wants and needs.

With all of this being said, are the census bureau, our President, the politicians, Wall Street, and the government adept at uplifting, restoring, and inspiring our return to prosperity for our posterity? 

A wise man once said, “Many prophets will rise up and deceive many. And because lawlessness will abound, the love of many will grow cold.” Another wise man added, “Then if anyone says to you, look here or there – do not believe it. For false Christs and false prophets will arise and show great signs and wonders, so as to deceive, if possible, even the elect.”

Once upon a time in Rome, there came a warning to its ruler… “Caesar, beware the ides of March!”

Politicos, be forewarned.

Is it the economic blues? I don’t know…but the beat goes on.

Til next time…

Opinion Line, USA Today, Friday, September 24, 2010
Contemporary’s Economics, Matthew T. Downey, Wright Group/McGraw-Hill