economic failure

It Will Get Worse -Be Prepared and Take Care of Yourself

It Will Get Worse -Be Prepared and Take Care of Yourself
12/28/2008 – by John Nelson (G8REngineer@yahoo.com)

I originally wrote this during the Christmas Holiday of 2008. Since I reference this paper in my blog, Economic Recovery? I wanted to post it here.————————–

My predictions for 2009 and 2010 are below. I felt compelled to put this together because I have shared these thoughts with my wife and many friends. I am bothered because I see a trend in daily newspapers and news programs to report with a degree of optimism, and then with surprise, when the news is worse than they had first reported. But, I keep finding the news is not worse than I expected.

As this year has gone by I have been concerned by current events as compared to history. Our government has bailed out defense contractors and other private companies before. In the 1930’s, the press and government denied what was taking place, but yet we have the benefit of history to know how bad things were. Today there is a certain level of optimism by many people and I hear comments like, “we are Americans and we always pull through.” While that statement may be true, I feel concern to blind acceptance that things are always going to be ok. Throughout this article I make references to natural disasters and other external events. I feel today’s economic issues are similar in that external forces are going to impact individual lives. If you ascertain nothing else from this writing I hope it is that the most significant economic changes in decades are currently occurring and preparing for the worst possible outcome will aid you in dealing with that possibility. Like all predictions or theories on trends, I may be wrong about the severity, it may be better or worse, or about the timing, events may come sooner or later. Regardless, I hope to convey concern and suggest preparation.

First, I want to provide some background information. I do not have cable television, I do not watch local news, and I do not read newspapers. On a daily and weekly basis I gather my news and opinions from the following sources:
Daily
• Bloomberg (http://www.bloomberg.com) – I first review world markets, particularly Asia and Europe just prior to going to bed and when I first wake. Second, the news wire provided here is far superior to any other source available
• Drudge Report (http://www.drudgereport.com) – a great link to numerous worldwide news articles
• Peak Oil (http://www.peakoil.com) – a link to various energy, climate change, policy, and other news articles
• Kirk Report (http://www.kirkreport.com) – Kirk is a day trader and offers stock information. But, he also links to a huge number of financial articles and opinions focusing on Fed and other central bank policies
• Economic Populist (http://www.economicpopulist.org) – Average people’s opinions about what is currently taking place. Of most interest are the specifics of research including graphs, data, charts and details to defend positions. Short articles, highly informative.
• Seeking Alpha (http://www.seekingalpha.com) – Similar to Economic Populist
• Yahoo Finance Home Page (http://finance.yahoo.com/) – What the average person sees for headlines
• NBC Nightly News (Podcast) – download video each day and watch following morning
• CNBC Fast Money (Podcast) – download video each day and watch the following morning
• BBC Global News (Podcast) – download and usually listen the next day
Weekly
• Kunstler Cast (Podcast) – James Howard Kunstler weekly podcast. Focus is on the end of suburbia due to changes with fossil fuels
• Bob’s Gold Price Column (http://goldprice.org/bob) – what the doom and gloomers think about gold and inflation
• Matt Simmons (http://www.simmons.com) – an energy expert

Change is taking place around us. If you had told me ten years ago that I might find myself living in a situation where I would not have power for 5-10 days, not be able to go to the grocery store to buy food – especially refrigerated items, I would find lines at gas stations, or buildings around me would be boarded up taking on a third world look, I would have laughed! However, I have lived through that situation in the summer of 2004 in New Smyrna Beach due to the hurricanes Charley, Frances, and Jean. From that experience I re-evaluated what it meant to be prepared. I thought I had everything I needed to survive: a couple of gallons of water, a bow saw, candles and a few flashlights. I learned how naïve I was. Since then, I have added a generator, chain saw and spare chains, lanterns, camping gear, stockpiles of gasoline each June, regular testing of the generator, and many other items.

Am I crazy or am I prudently prepared? Any resident of the state of Florida who does not keep minimum supplies is living in a state of denial. Other disasters and events have struck in the last 25 years in the United States and elsewhere – how prepared would you be to take care of your family?
• Northridge Earthquake
• Hurricane’s Katrina, Charley, Andrew, Hugo, Floyd, etc
• Coal Ash Levee break in Tennessee
• Devastating tornadoes
• Mount St. Helen’s
• Christmas Tsunami in Indonesia
• Rogue wave – Daytona Beach 1996 (or so)
• Springtime flooding in the Midwest
• Terrorist attacks of 9/11/2001
• Rodney King riots
• Heat wave in Europe killing hundreds in France
• War in Sarajevo, a beautiful Olympic city
• Cholera outbreaks in Africa, 2008

My point is disasters and upheavals occur regularly, and without warning. Our ability to take care of ourselves is what matters in each case. One need only picture scenes from the news of how Hurricane Katrina victims responded versus the same, significant, devastation from Hurricane Charley in Punta Gorda, Florida and the importance of proper and prudent preparation becomes apparent. More importantly, self-sufficiency and the ability to survive without reliance on others or civil authorities is incredibly apparent.

Most citizens in the United States have lost the ability to think and be self-sufficient for themselves. Take an automobile owner’s manual from the 1960’s and compare it to today, 40 years later. My 1967 Mustang has details on lubricating the chassis, changing a tire, performing valve adjustments, and other maintenance. Today’s owners manual states the warranty will be voided if the work is not performed by an authorized service center. I would assert the average person, especially Generation X or Y, will call roadside assistance and wait 90 minutes to have a tire changed instead of taking 10 minutes and performing the work themselves. Furthermore, if food becomes an issue of concern I believe most citizens will be at a loss. They will not know how to grow or kill food due to the basic belief that food comes from the grocery store. I had a friend share his concerns about the differences today versus the Great Depression – in the 30’s he feels a person would have given his place in a food line to another out of kindness and sacrifice. Today, he feels your life is at risk due to the selfishness of most people and their inability to survive without assistance.

One problem society seems to face is forgetting our history. As recently as summer 2008 gasoline prices were over $4.00/gallon. Behaviors were changing: scooter and motorcycle riding was up, SUV’s purchases declined catastrophically, people moved closer to work or considered changing jobs to reduce commutes, trips were combined, leisure travel was eliminated, and overall there was a general trend toward conservation. In 1974, due to political events, Americans had to ration gasoline resulting in huge shortages. Odd and even days were used to determine purchases and none could be made on Sunday’s. An immediate move toward smaller cars was made. To a lesser extent, the same problems arose in the early 1980’s and panic over dependence on oil again ensued.

During 2008, many newsworthy events have taken place, but without the benefit of seeing them all at once it is hard to imagine the economic and societal decay taking place around us:
• Rice and flour shortages on the west coast as Asian populations understood shortages oversees
• Rising global food prices due to US policies on ethanol
• Gas shortages in the Southeast US due to supply problems after hurricanes
• Over a dozen airlines went into bankruptcy or out of business
• Major brand stores went bankrupt (Steak n Ale, Circuit City, Linens and Things, etc)
• More than 170 banks failed as of 12/1/2008
• Christmas holiday spending was the lowest in 40 years
• Year over year housing price decline of 13%
• Unemployment claims are at their highest in 25 years
• Diminishing new job opportunities, compounding unemployment problems
• Dow Jones high of 14,000 in October 2007, low of 7570 in November 2008 – 45% erasure of value
• 1 out of 10 mortgages is in default or behind on payments
• Rising defaults on credit cards and car loans

Throughout the year, news sources have reported events with an element of denial or ultimately surprise when the data become available. Just this week, on 12/26/08 I heard the following reported on Fox News Network:
“Retailers were surprised at the worse drop in holiday sales in over 40 years.”

They went on to report possible reasons such as: there were 6 less shopping days between Thanksgiving and Christmas, a holiday snowstorm that kept consumers away from malls. The comical reporting came next: some consumers may be concerned about job loss and not spending as much, credit cards are maxed out and no new credit is available. Last but not least, they reported that the economy of the United States is consumer based and that the total GDP – the production of all products and services – is 70% consumerism. Thus, without the citizens consuming the economy is grinding to a halt. ‘They’ need to force ‘us’ to start consuming.

Our problem as a country and with our current economic situation is we do not make anything that anyone else wants. We make money and recycle it within our own borders. Thus, growth is a fantasy based on a false reality. The best example is real estate over the last six years; the rapid growth had nothing to do with a true increase in value due to supply and demand. Instead, the easy availability of credit perpetuated a debt-based drive toward home ownership where prior lending standard required 20% down (leveraging of 5:1) now allowed 5% down (leveraging 20:1). Finally, these standards were reduced to 0% or even -5% down – the equivalent of infinite leveraging. This was a house of cards doomed to collapse. During this time, the media constantly reported that housing prices would recover within a three to six months. This took place throughout late 2007 and all through 2008.

I had to set the background for where we have been before I felt I could make predictions on where we are going. My synopsis is below with a predictive narrative and finally recommendations to plan for the next 2-3 years:
• Housing – there will be no recovery in housing before the end of 2010. Housing prices in some areas inflated as much as 2%/month (24% per annum). Historically, housing rise at a rate equal to or just above inflation. Thus, it will take 10-15 years to work back to the 2006 highs. This is compounded further by an inventory of 4 million homes for sale when historic inventories are between 2 and 2.5 million. Last but not least, lending is not available to purchase homes with debt.
• Credit – Consumers will not have credit readily available until late 2009 or early 2010. Our consumption based economy will remain frozen until the spending engine can restart.
• Equity Markets – The Dow and S&P500 remain over valued. Current estimates of average earnings for the S&P are about $55. Thus, the S&P is trading on a forward multiplier of about 18-20. Analysts have consistently overvalued earnings and multipliers throughout 2008. Many blue-chip, dividend paying stocks are trading closer to a multiplier of 7-10. Historic norms are 14-15. Thus, using a multiplier of 10, the S&P should be at 550.
• Currency – The Fed has printed huge sums of monies. Taxpayers generally pay about $1 trillion per year in federal income taxes. In the last 12 months Congress and the Fed have promised about $7 trillion in bail outs, stimulus, and balance sheet increases. As large as the numbers are, a huge deflationary move has taken place due to the erasure of debt, thus offsetting some of the severity of the inflationary monetary policies. If other governments reduce lending rates and increase currencies, the dollar will not be devalued. However, inflation is inevitable.
• Oil and Energy – Oil has plunged to the mid-$30s from a high of $147/bbl in July 2008. Commodity markets tend to overshoot both directions to the high side and the low side while supply and demand realign. The issue with oil is not one that we are going to have no oil. Instead, the marginal cost to produce each subsequent barrel of oil is higher than the preceding barrel. This is the root concept of Peak Oil; supply will not keep pace with demand. Hubbert’s peak in the early 1970’s in the United States is well-documented and the same will apply to world supply and demand. During the peak there will be wild oscillations in prices, supply, and demand. We are at the beginning of the peak and experiencing the swings.
• Climatic Change – the Green lobby is promoting huge expenditures due to perceived global warming. Regardless of political views, climatic change appears to be taking place. The summer Artic ice in 2008 melted at a rate that allowed transit across the polar ice cap from North America to Asia and Europe that had not been possible due to being previously frozen for the last thousand years. Plants not exposed for a thousand years appeared this summer. The Greenland Ice shelf is melting at an unprecedented rate and the risk of a significant piece sliding into the ocean is increasing daily. There is less snow and ice to reflect sunlight causing a possible natural exponential warming trend that can not be reduced. Salinity values in the North Atlantic are changing, thus impacting the flow of the gulf stream and the natural cooling process in the northern hemisphere. These changes may be normal on a geological time scale which we can not measure or they may be due to increases in carbon in the atmosphere driven by man made changes in the last 150 years. Regardless, they appear to be taking place at a significant rate. This climatic change will impact coast cities, farming communities, water supplies, and world hunger.
• Geopolitical Issues – The middle-east remains an area of concern with religious based hatred of western civilizations being a catalyst for terrorism and oil policy changes. Israel has ramped up hostilities in Gaza Strip and India and Pakistan are both nuclear powers with increasing hostilities. Russia is establishing herself again as a world power, particularly with an interest on controlling energy and pipelines feeding Europe.
• Politics in the United States – A new, inexperienced president will try to create policies to save the country as he promised during the campaigns. At the same time, the House Speaker, Nancy Pelosi, has a strong liberal agenda that she believes she can now accomplish including: union supported legislation, national health care, increased taxes and wealthy producers, and a general move to a more socialized country. President Obama will work to pass legislation to make owning firearms more difficult, most likely through taxation on ammunition or illegality of personally possessing ammunition like Switzerland successfully implemented in 2007. He will try to create 3 million jobs, but that will not impact the economy for 5-7 years. He will support another stimulus package and saving the auto makers, moves that will further add to our debts.

In 2009, I see a temporary stock market rally based on the euphoria of a new president and false confidence that he can implement programs that will save the country and the average person without significant ownership or pain on their part. The House will pass another stimulus package which will not stimulate the economy as consumers hoard cash out of fear of losing their jobs. The president will be tested by events in the middle-east that will ultimately result in him appearing weak as nothing can be done to prevent the hostilities that have brewed for thousands of years. Throughout first quarter 2009 unemployment will continue to rise at unprecedented rates, reaching 10% by April and 12% by July. Housing prices will continue to decline as lending is not available. As unemployment increases, consumers will further reduce spending worried about their own future and possible job losses. Those that have a job will be reluctant to consider moving and will not purchase existing or new homes.

Company earnings will decline as consumer spending slows and worldwide spending continues to decline. The stock market will test new lows at 7000, 6000, and finally 5000 before settling into a period of flat trading between 5000 and 6500 for three to five years. The media will begin to report, with surprise, a rise in consumer prices and producer prices in late 2009 as inflation begins to take hold due to the failed policies of the Fed and Congress. Housing again will not restart because lending rates will increase from 5% back to rates not seen since the early 1980’s of 12-14%. Oil prices will also increase for three reasons: a devaluation of the dollar against world currencies, reduction in supply from OPEC to gain a foothold back to the $80/bbl level they desire, and the previously discussed middle-east tensions causing further supply concerns. Hyperinflation will take hold in early 2010 causing President Obama to sign executive orders for price controls on basic staples such as milk, bread, flour, and sugar. Ensuing hoarding and shortages will occur as citizens try to stockpile supplies in anticipation of shortages. Riots and general unrest, particularly in New Orleans, Detroit, Washington DC, and Los Angeles will be reported. These riots will occur because the average population has not been taught how to survive or be self-sufficient. Instead, they have been raised as consumers with all of the requirements of civility readily available at a nearby Wal-Mart.

My recommendations are to prudently prepare. Just like an impending storm in a coastal Florida city, preparation will be the key to survival. Some of these changes will happen slowly, others rapidly. Preparation may be as simple as just thinking about what might happen. Regardless, good preparation may involve purchasing or stockpiling goods not normally kept.
• Investments should be made over the short term with sales into rallies and purchases in the troughs
• Short the S&P with the SDS if the symbol goes below 80 (or 85) and sell when above 110. You can repeat this strategy many times
• Reduce debt – do not take on new debt
• Refinance at historically low interest rates. They will be at 10-15% in the future. Refinance below 5.25%. You will not see this again in your lifetime.
• Do not make debt based purchases when rates are rising or above 9%. The monthly cost of cash flow is 30% minimum
• Hoard cash – it will diminish in value, but cash is king. Cash provides options.
• Make wise purchases – do not buy luxury or un-needed items
• Adequate preparation for 7-10 days of survival without power should be a minimum requirement regardless of where you live
• Tools for debris removal, house repair, and fixing and repairing household appliances should be available
• Basic first aid kits should be kept in all cars and at home
• Personal relationships should be made with local doctors and police to facilitate first priority care for you and your family
• Consideration should be given to a safe haven, a place to go
• A family plan should exist in the event of communication failures (no cell phones)
• Arming with a shotgun, rifle, and pistol should be done. Weapons can be used for protection, hunting, or trade if needed. They will last a lifetime and if political policy changes they may become very valuable
• Further preparation should be made in the face of inflation – spend an extra $20/week grocery shopping on staples and dry goods
• Ammunition, Gold, and Jack Daniels will be the currency of the future. Whether or not you own a gun, purchase one to two boxes of shotgun shells, 9 mm, or .38 cal ammunition monthly. Purchase a bottle of Jack Daniels monthly. All can be sold later.
• Learn basic first aid
• Consider solar power supply options and re-evaluate power tools owned to be rechargeable
• Explore basics of wind and solar electricity to charge power tools and items to maintain basic civility
• Inverters that convert 12-volt battery supplies to 110 to use with modern amenities
• Find outdoor solar lights at garage sales or store sale’s racks and use as indoor lighting by moving the solar panel outdoors and the lights inside
• Accumulate good camping gear – lanterns, sleeping bags, stove, and tent. Camp for a weekend or longer periods to understand what it is like to live without basics. Add to gear over time to improve survivability. Every time I camp it seems I want more flashlights, batteries, knives, propane, and lanterns to make my life easier. If it rains I want to stay dry – bags, containers, tarps, etc.
• Blankets, jackets, scarves, gloves
• Store all tools, gear, in organized easy to take with you containers
• Ensure tetanus and other immunizations are up to date
• Stockpile basic medicines such as Aspirin and Benadryl, iodine tablets for radiation exposure
• Keep Mylar, Duct Tape, chain saw blades, tarps, nails, screws, tie wraps for emergency repairs and protection against weather, gas hazards

All of the above can be part of your basic lifestyle and should help you feel prepared without feeling like a nutso preparing for the end of the world. Choose to consider living with the idea that Wal-Mart and the grocery store may not be there tomorrow.

Test your preparation with the following questions:
1) I live in a winter storm area; can I survive the cold and snow without power for 7 days?
2) A tree lands on my house during a rainstorm, can I make repairs on my own?
3) A train derails spilling chlorine gas, what would I do?
4) I am traveling and a terrorist attack occurs, communication is cut with my family. What would we do?
5) Price controls take place and bread costs $10/loaf. Can I cook and survive?
6) Social unrest is occurring and the National Guard has implemented curfews. Power is out and the grocery stores are closed. What would I do?
7) Gasoline is available in rations of 20 gallons per month, what would I do?
8) We are evacuating to another locale due to …….I find myself in tense situations while buying gasoline, what would I do?
9) A nearby levee breaks flooding our town and my neighborhood, what would I do?
10) An earthquake occurs, or the ground shifts resulting in the collapse of my home, what would I do?

Books and websites I recommend
• “The Long Emergency”, James Howard Kunstler – a rather prophetic view of what is currently happening written in 2004
• “World Made by Hand”, James Howard Kunstler – a fictional look at ‘life after’. After collapse of the government due to some event such as war or social disorder we are living like it is 1890 again
• “The Creature from Jekyll Island” – How the Federal Reserve was created and the control of banking over all decisions
• “Jericho” – The CBS Television series, two seasons. The writing/acting is horrible in the first few episodes but improves. It is too much like other CBS shows. However, it strengthens. You should take away from this the relationships that form, how people deal with crisis, and the warring tribal nature that develops between towns
• “Atlas Shrugged”, Ayn Rand – a fictional look at the world in a sense where producers choose to no longer be victimized by policies that take from those who make
• “Lucifer’s Hammer”, Larry Niven – a fictional book I read in 1979 about a meteor colliding with the earth. The hero is an engineer who prepares and survives through self-sufficiency
• Peak Oil, Life after the Crash (http://www.lifeaftertheoilcrash.net/) – Worth reviewing to gain education about possible changes in the future
• Build a Wind Turbine (http://www.mdpub.com/Wind_Turbine/index.html) – Want to build a practical windmill or solar panel – great site to see someone doing it

Carbon Copy America

Carbon Copy America

My wife and I came down off the mountain this weekend and visited “civilization” to engage in the most popular sport in America: leisure shopping. Visiting the Mall of Georgia is like visiting Altamonte Mall. The similarities start with traffic lights, waiting to make turns, localized strip malls with a variety of specialty stores, car dealers using balloons to lure naïve consumers, and franchised eateries overfeeding overweight patrons. My first inclination is to shop locally, like I did in New Smyrna at Coronado Hardware or eating at the Dolphin View, but lacking choices I was forced to head to the Mall.

My intent here is not to complain about the Mall, but to comment on willfulness to trade perceived success for lost identity. I have previously written about the “good old days”, circa 2006 during the boom, and also commented on the loss of small towns in my column, “Taking Back Roads.” At the end of our shopping expedition on Saturday my wife, LeeAnn, said, “we could be anywhere in America. Looking around the stores and architecture are no different here or in Altamonte Springs, Ft. Worth, or Minneapolis.” Her observation was spot on; we chose the economic path that brought our destruction and it started in the early 1990’s. Thinking back to the 1970s and 1980s, appliance and electronics stores were locally owned; Home Depot, Lowes, and Best Buy did not exist except in their original markets. Wal-Mart was a regional Arkansas chain, not a megastore found in every town in America. Even the Mall’s department stores appeared quirky to the out-of-state traveler as they represented decades old local businesses like Burdines, Daytons, Wanamakers, and Gimbels. And of course, the out parcels of Linens and Things, Old Navy, and Michaels did not exist.

In the 1990’s with easy access to money, a rapidly rising stock market, low barriers to brokerage services and do-it-yourself investment attitudes the economic boom erased our identity. Local architecture and business acquiesced to national franchises and bland buildings void of character delivering mass-produced Chinese merchandise meant to symbolize success to anonymous strangers. On a local level builders nationalized and did the same, trading character for mass production of McMansions with bathrooms larger than the prior generation’s living rooms. New Smyrna Beach and Cleveland, Georgia lag behind, but yet both claim progress by advancing box stores and abandoning local business heritage. Just push “Copy”, America has lost her character.

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.”

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?”

Haiti and New Orleans

Haiti and New Orleans

When I was 10 years old my family moved from Minnesota to California. The move was huge, but it caused me anxiety because I had watched television shows predicting the next big earthquake and California falling into the Pacific Ocean. Of course, that was more than 30 years ago, and California remains part of the continental United States. However, the residents of California live with the threat of earthquakes every day. Unlike any other natural disaster phenomena, I would conjecture an earthquake is the worst threat to face. Contrastingly, in Florida we have days, up to a week, to prepare for a hurricane. Tornadoes come with minutes of warning, or hours if paying attention to conditions. Even mudslides, floods, and fires provide a reasonable warning. An earthquake, on the other hand, comes any time and with no warning. If you live in California though, you know the threat exists. Living in Haiti on the other hand is a place with minimal earthquake risk.

Facing disaster is reasonable when you know what threat exists, or more importantly have time to prepare. When Katrina struck New Orleans warnings were issued ahead of time, the citizens had a choice to stay or leave. Of course, a weather forecast is never perfect, but with Katrina the severity of potential of the storm obviously loomed. In contrast, Haiti was struck by the worst earthquake in 200 years with no warning, and unlike California, no predisposition for the expectation of earthquakes. It appears Haiti’s government and communications infrastructure collapsed, not unlike the local resources of New Orleans and Louisiana. Immediately, Haiti reached out to its neighbors to seek help, and so did New Orleans. In both instances, massive federal aid packages were mobilized to assist.

News coverage of the events in Haiti has been compassionate and focused on the successes of rescue. In South Florida the media is providing local stories of airports launching relief, medical teams departing, and families reuniting. It is nearly impossible to turn on the television without a reference to the current situation in Haiti and how the citizens of the world are reaching out to their neighbors. Unfortunately, last week there was troubling coverage of gangs, violence, and looting. I found the similarities to the aftermath of Hurricane Katrina in New Orleans striking in this regard. Sadly, there are people who disregard the brotherhood of man and instead take advantage of disaster and troubling times. Amplifying this situation is sensationalism by the press of the minority doing so. Bothersome as these situations are though, we should not be left with images of theft and violence, but focus on the success of rescue and efforts to help those in need.

However, the real story remains at the ground level, not from the massive organized efforts. The individual rescues, and thousands of examples of neighbor helping neighbor. The real survivors in Haiti are those helping, not seeking assistance or depending on a foreign nation to save the day. The real survivors understand their fate is up to them and do not blame anyone for the earthquake that struck. In contrast, the residents of New Orleans shunned personal responsibility, looked to blame others, and waited for someone to save them. Haiti’s earthquake is going to forever change the look of neighboring nations as its own people realize it will take decades to recover. As we watch from afar, I challenge you to examine your own preparedness for unforeseen disasters, and remind you to believe in the goodness of people helping 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.