The nightly news is a constant reminder that record numbers of homeowners are falling behind on mortgage payments and the U.S. economy is losing jobs at an alarming rate with companies big and small slashing their work force. A half-million American jobs disappeared last month, the worst mass layoffs in more than three decades, as the nation spiraled downward in what could be the hardest hit times since the Great Depression. Compound this with the fact that more than 3 million manufacturing jobs have disappeared since 1998, and the Economic Policy Institute estimates 59 percent-or 1.78 million-of these jobs have been lost due to the explosion in the U.S. manufacturing trade deficit over this same period and it is understandable that you and I don’t believe that little things we do can make much of a difference in this financial crisis. But on my weekly trip to the store, I had an epiphany and began to think differently. Read more »
We have accepted the fact that in lieu of a stimulus check in the mail, we should be seeing more money in our paychecks. And that is fine and good. In fact, rumors abound throughout this country that Obama will seek major tax cuts in his stimulus plan, and there are several tax breaks under consideration right now. All this talk makes taxpayers feel like relief is finally on the way. But what can we really expect? One plan is to provide a tax credit that would allow companies to reduce the tax they withhold. However, if that is only $500 for individuals and $1000 for a couple, as proposed on CNN.Money, I don’t see how that is going to impact the way I spend my money. If I break $500 down by 26 paychecks a year, I will only see an increase of about $19 per payday. I do understand the economics behind this but it doesn’t make me feel any better. A mere $19 is not really enough money to increase a credit card payment and it’s not enough money to stash away in a savings account so I probably will spend it without thinking, which is exactly the intention of this tax cut. The problem is, $19 every other week is not going to make me feel very hopeful that the economy is turning around and this feeling will probably lead me to continue living as frugally as possible. I wonder how many others will feel the same way? Read more »
Downsizing, Upsizing and Rightsizing. Boomers were the first generation to be able to graduate from high school and enter the job market expecting to earn a living wage. Now, they are the first group of employees that are perceived by management as ‘LESS’ valuable than younger, entry level, lower paid Gen Xer’s entering the job market today. You probably know of at least one baby boomer who was forced to take early retirement or who was forced out of the job market due to cut backs and streamlining. These boomers find themselves too young to receive any social security benefits and apprehensive about going back to school to acquire new skills. But, without a college degree or high technology skills, many are currently working in lower paying jobs or sitting home frustrated that they want to work but can’t find employment. Compound this situation with the current inflation and a failing economy and the question arises, will our generation, the one that was promised a better life than our parents, end up worse off than our parents? Read more »
Obama and his team had initially hoped after his election last month that they could remain largely detached from current events and plan behind the scenes for the new administration. But the demise of the economy, instability in the financial markets, the collapse of several big banks and the Big Three Automakers asking for assistance - combined with President Bushs’ lack of clout with Congress and the public - have heightened pressure on the president-elect to assert himself. Despite the fact that he has stated over and over again that we only have one president at a time, in the Democratic Party’s weekly radio address today, Obama, baited by Democrats who want a more aggressive Obama, began rolling out his plan for economic recovery. He has asked his economic team to develop an economy recovery plan that will help Wall Street and Main Street. His goals are to create 2-1/2 million jobs, rebuild our infrastructure, improve our schools, reduce our dependency on foreign oil and save billions of dollars. He did not say how much each idea would cost nor did he attach an overall price tag to the proposals. He said that he would fill in the details in the coming weeks. The Swamp speculated that his comments reflect the growing belief among his top advisers and Democratic leaders on Capitol Hill that the fast declining economy and the continued loss of jobs requires a massive spending program even if it means swelling the national debt. Read more »
Well, it’s official. According to MSNBC the U.S. economy began the fall into recession back in December of 2007, just about a year ago. The National Bureau of Economic Research panel, made up of academic economists, finally declared what most private economists, lawmakers, business people and common everyday folks already knew. At least, I have know this for quite some time and that’s why it boggled my mind why all of a sudden it made the news. Anyone who has been the least bit attentive is aware that unemployment has been on the rise and the stock market has been on the decline, major financial institutions are crumbling under the weight of bad debt and, in my mind, the biggest indicators of all: cars aren’t selling and people are using their credit cards less. Despite the fact that President Bush is not ready to acknowledge that this isn’t a full-blown recession yet, Treasury Secretary, Henry Paulson finally agreed and actually used the “R” word Monday. This is really an omen that things are bad. Read more »
The big three automakers went to the hill this past week to ask Congress for a bridge loan of twenty-five billion dollars. Believing that they could not be denied, these CEOs were ill-prepared to face the inquistion of lawmakers and too arrogant to be shamed by Congressional remarks and comments to show humility. LA Times reported that the CEOs of Chrysler, GM and Ford ran into a wall of skepticism from a broad cross-section of lawmakers concerned about the environment, unions and Japanese auto plants in their home states; all topics that the Big Three seemed to dismissively sidestep with a fancy dance. As I watched this story unfold over the last few days on television, I couldn’t help but wonder, what were they thinking? These are very highly-paid, highly compensated CEOs of the three major American automakers. These are men who are responsible for making dynamic decisions that affect not just their employees, but support businesses, educators, home builders, politics, environment and the list goes on. The tentacles of the auto industry are many and deep and they are embedded in just about everything that is American. Yet, these Autogods were totally clueless. In fact, I see a whole new genre of dumb jokes that has nothing to do with blondes, on the horizon. Why did they fly in on their private jets and face Congress without a new and improved game plan? Read more »
Financing the Retirement Dream
Just when I thought my nest egg was about ready to feather my retirement, the bottom fell out of the economy and within days, what was once egg is now just shell. I believe that, despite this recent set back, my investments will again grow and prosper. I know that I must wait patiently and continue to invest, and I also know that there are times that I need to rant, re-evaluate and look for wisdom. This Section is dedicated to just such rantings and moments of wisdom. I hope that you might find something here that you can identify with or offers a moment of solace in these difficult times.
To add a little more fuel to the already flaming meltdown, I am now hearing rumors around the Internet about a covert monetary coalition between the U.SA., Canada and Mexico that will virtually render all of our hard earned but depleted savings and investments to pennies on the dollar and that these three nations would be trading in a new currency called the Amero. Here is a little info about it from Wikipedia. It was Polish economist, Mateusz Machaj who pointed out that the Amero theory is a Canadian pipe dream that is going nowhere, and that the images you see all over the web are actually the designs of a private artist named Daniel Carr. I think back to when European nations banded together to create a common currency. According to my memory, the reasoning behind the Euro was that these countries were small and people could conceivably travel between them in a short matter of time making money conversion a headache, especially for tourists. It took years of working out the details and votes by the people of those countries to make it happen. During this time, there was much talk on the news and in fact, before it was common knowledge to the masses, one of the soaps (I think it was General Hospital or Guiding Light) picked it up. Read more »
Here’s a news flash! According to AOL Money & Finance, consumers ratcheted back their spending by the largest amount in 28 years and tougher times are still ahead. Clobbered by pink slips, shrinking nest eggs and falling home values, consumers are holding on even tighter to their wallets while party members argue about which political candidate has what it takes to lead us out of this meltdown. Personally, I am not sure any one really knows the solution to this problem because I think we are in familiar but uncharted waters and it will take a series of trial and error attempts to figure out what is going to work. For most of us, we will have to continue to watch our spending and wait it out. How can we benefit from these tough times? For one thing, we can make a list of those things that are most important in our lives and post it where we can see it every day; an overt reminder that there is more to life than money. Another thing that we can do is find more creative and less expensive ways to spend time with family and friends. The joy is in the company we keep, not the events we attend. Remember pot luck dinners and card/board game nights? Just because the economy is dismal, does not mean that our lives have to be too. When faced with the clouds on the horizon, seek the silver linings and who knows, these just might turn into the “good old days” that everyone talks about. Please help make it easier to get through these difficult times and share your ideas or reminiscences of simple but significant memories.
I just read There is a Silver Lining on the Newsweek website and it has some interesting insight. To paraphrase, this article says that amid all the difficulties and hardships we are about to undergo, there is one silver lining. This crisis has - dramatically, vengefully - forced the United States to confront the bad habits it has developed over the past few decades. If we can kick those habits, today’s pain will translate into gains in the long run. We, not only as a nation, but also as individuals have depended upon easy money to support our spending frenzy. I realize that I too, am part of the problem. I have purchased things on a whim that I did not need, spending money unwisely instead of saving for a rainy day. Sitting idle in my closet are new shoes that have never been worn, sweaters that still have the sales tag attached and dresses that I will never wear. In my bathroom are a variety of hair products that have been used once or twice and then shoved under the sink and beauty products that promised miracles but didn’t deliver. I have enough blankets and towels to outfit a mansion but I only have one bedroom and one bathroom. There are so many things that I spend money on needlessly without thinking. Maybe this is my wake-up call. Read more »