Great Recession

The Good Old Days

The Good Old Days

In my lifetime I never thought I would refer to “when times were good”, or “the good old days,” terms I always thought were left to my grandparents. Of course, some life experience is required before such a reference can be made and this might also mean I am getting older. Without a doubt we can now have conversations that start with the statement, “when times were good” and instantly pinpoint a reference we all understand. Curiously, when riding the euphoria of economic success it is easy to ignore the impending potential crash. Although the one year anniversary of the stock market low was just last week, it was the peak of November 2007 that defines the tombstone of good times. Since then personal experience through home loss, job loss, bankruptcy, asset sales, and moving have defined America. Most of us know someone touched by the recession and we will forever be influenced by what is happening around us.

Just recently I have been in several conversations where the words “when times were good” were stated. The first time I paused momentarily, but everyone present understood what was said. The next day the same scenario similarly repeated itself and I realized something important had happened. Essentially, the most recent economic downturn has cemented in our minds a change and we are living through a time which only the rearview mirror of history will provide a true opinion. Unlike Pearl Harbor Day or September 11th, it will take years to understand the Great Recession of 2008-2010. Although hardships are upon many Americans, a theme of ignoring mainstreet has developed. Looking at history of the Great Depression of the 1930s brings similar observations. For example, 1930 and 1931 provide numerous examples of President Hoover and Treasury Secretary Andrew Mellon assuring the people the worst was over and prosperity was right around the corner. In a May 1, 1930 statement, Hoover said, “While the crash only took place six months ago, I am convinced we have now passed the worst and with continued unity of effort we shall rapidly recover. There is one certainty of the future of a people of the resources, intelligence and character of the people of the United States – that is, prosperity.”

History has an uncanny ability to repeat itself, but yet we fail to learn from our experiences. At one level those living in the government and financial centers of our country seem to enjoy uncontrolled spending, record deficits, market highs, profits, and record bonuses. For the rest of us, business closings, vacant office space, abandoned homes, increasing food and fuel costs, and unemployment seem to be the norm. “I see no reason why 1931 should not be an extremely good year.” – Alfred P. Sloan, Jr. of General Motors Co. stated in November 1930. Week after week we see conflicting economic news streaming at us, reports of increased consumer spending for February indicate despite snowstorms we reached in our pockets to spend money, but contradictorily consumer sentiment dropped.

My point is we have to wonder how the current economic environment will shape our own lives and futures. Our children may never know “when times were good” if our economy stagnates like the 1930s. My confidence in massive spending at levels never before seen is low, because there are always consequences to every action. Future generations will have to pay for this administration’s actions either through taxes or inflation as there is no other way to slow the velocity of increase in the money supply. A cloud hangs over our economy and future; I wish things were like “the good old days.”

March 20, 2010 by Capitalism Depression Great Recession

Sheep

Sheep

This past weekend was the Superbowl, a time honored tradition of getting together with friends, watching the game, cheering for fantastic football plays and watching commercials at halftime. I scoff at this as a continued hilarious process of entertaining the sheep, or the “sheeple” if you prefer. Sadly, I assert more people know the names of the quarterbacks of each team and not the names of their two Senators. Most people will know which team won the game, but cannot name which party has a majority in Congress. Lastly, the commercials will be recounted with detailed attention, but the average person cannot describe the details of the largest federal budget passed in history this last week.

I find myself an outcast because I don’t watch the Superbowl, or follow professional football obsessively. I admit I don’t follow any professional sports religiously, although I may know names, teams, or who leads a league at times. And of course, if I were invited to a game or race, I would joyfully attend. Preparing this week’s column I had realized I had no idea who was playing, and did not care. I realized a long time ago I had no interest in watching millionaires who made no contribution to society run around on a field or court. When the players make the news it is usually due to beating their wife or girlfriend, an affair, drugs, or shooting. But yet, our society idolizes these players that have near superhuman strength.

With President Obama’s populist push against the CEOs and executives of major corporations I must wonder why sports and Hollywood celebrities are exempt. The American people readily hand their money over to large entertainment corporations that provide obscene riches to a very few in an environment where nepotism is more likely to drive success than any type of skill. On the other hand, a successful businessman who risked his home, personal family life, and employed others is now demonized if he rises to a successful level. No one questioned the use of private aircraft and limousines by Paris Hilton, but the automotive executives that employ hundreds of thousands and whose company’s stock is owned by the masses were chastised by Congress for wisely using their time to travel via an efficient means. Ironically, Nancy Pelosi travels every week via private aircraft from Washington, D.C. to California at taxpayer expense but that is not questioned.

President Obama has made it clear that to succeed in America by hard work, rising through the ranks, managing people, and running billion dollar corporations is bad. However, it is acceptable to sign a hundred million dollar contract to play games for a few years, and even get paid if hurt. Or, like Conan O’Brien to get $30 million to peacefully leave a contract at NBC. As much as his populist agenda is being promoted, it scares me to think about a lottery society where success is measured by luck rather than a society that favors hard work, risk, and rewards success. Life is not fair, everyone is not a winner, but America has led the world by everyone having the opportunity to succeed regardless of gender, race, or economics. The Romans distracted the people with entertainment, ran lotteries, and controlled the people to take taxes, and control the people. Governments know when the people are entertained they will turn their backs on the important issues and trust others to care for them, just like sheep. Sadly, it seems like the American people have become sheep who do not care. Now, I must ask, “Who won the game?”

February 19, 2010 by Depression Great Recession Mainstream Media Obama Stupid People

Crisis Preparation

Crisis Preparation

I have read a lot about preparation for TEOTWAWKI (The End Of The World As We Know It) lately. However, I think there are other issues of greater concern than that which one must consider. I am repeating, changing, and re-writing some of what I have read. But, I go back to the root of what I have always known; preparation is about facing a threat. A threat can be measured three: probability of occurrence, intensity of destruction, and duration. A matrix should be made to consider the likelihood of a threat, where you might be during the occurrence, and what preparations should be made.

Supplies need consideration next. Preparation for supplies can be broken into several categories. Once the categories are identified a second stage of analysis must be completed – do you require mobility or will this preparation be to hunker down and stay in one location?

I feel most people fail to make any preparations in their lives because it is overwhelming to analyze “what-if” scenarios and planning around them. At the same time, ridicule of preparations is easy due to the old stereotypes of bomb-shelter fanatics, in the woods survivalists, and hippies living in communes off the grid. Ironically, these are the people that the unprepared will flee to.

Living in New Smyrna Beach, Florida I constantly faced a hurricane threat, but yet, like many friends and neighbors, brushed off this threat. I felt I could go to Wal-Mart, Lowes, or Home Depot and retrieve what I needed on demand. Although not as destructive as a ground-zero events like Katrina I faced three hurricanes in six weeks time. We faced a long duration of inconvenience – no credit card machines, gasoline shortages, lack of groceries, building materials shortages, and no ice. I had friends without electricity for 10 days. I could not locate a chainsaw chain to remove and cut trees. There was no ice available to keep food safe because there was no electricity. Gas stations were closed due to lack of electricity, the pumps would not work and they had no credit card machines. All of the foods spoiled in the grocery store meat and frozen sections. Thus, they were forced to close to clean up their stores and no groceries were available. This was a modern crisis of long duration.

Events like Katrina, 9/11, the Northridge earthquake, and spring floods make headlines. However, watching a crisis on the evening news is entirely different than living through it. One side of 9/11 often forgotten was the travelers stranded away from home – if you had boarded a plane on 9/10/2001 and traveled across the country for business you suddenly found yourself stranded without a way to return home. There was a sense of suspicion in the country and finding yourself stuck as an outsider with only business clothes to wear could create problems. Fortunately, the banking system stayed intact and credit card machines were not shut off. Had the financial industry been questioned, cash would have been required just to eat, pay hotel bills, and get new clothing. In this case it was not a significant event for those away from New York but an event of extreme inconvenience. Again, even telecommunications worked, but it is not hard to imagine the government shutting telecom to prevent communications among terrorists. In this case contacting family would not have been feasible, lending to panic among those stranded away from home.

Copyright (c) 2009 John R. Nelson. All Rights Reserved.

October 21, 2009 by Depression Great Recession preparedness Stupid People