OK, I have to admit that I’m writing this in large part because it’s after midnight and I’m still awake.
The news of the day has left me thinking. I’m far from an economic expert. Most of what I know about economics comes from a few classes, notably an MBA macroeconomics class. But, I feel that I can have a reasonable understanding of things. Having said that, the economy doesn’t seem to be good.
This morning on the radio, I heard the jobs report. The good news… 11,000 jobs lost last month and unemployment dropped to 10%. That was the good news???? I guess when the report says that half a million fewer jobs were lost than previous month that is good… unless you were one of the 11,000. Of course, part of that story was that economists don’t believe the number could be that low and there must be an error.
Then while waiting to return an item at IKEA, I watched part of President Obama’s town hall on CNN. A student asked if legalizing prostitution, drugs, etc. would stimulate the economy. The President thanked the student for the boldness of his question and proceeded to give the politically answer completely dismissing any possibility of that happening. But, I found the rest of his answer far more interesting. There is no doubt that Obama is extremely intelligent. He gave a brief synopsis of the evolution of the US economy from agrarian to industrial and now to one of information. He used an example of a factory only needing 10 employees to do what 100 once did as the result of automation. So, basically he was trying to tell the people of the midwest (yes I know he was in Allentown, PA) that those jobs aren’t coming back. He says “green” jobs are the answer. I hope that they are. We are definitely in a transition here and I’m not sure anybody really knows how it will play out.
The next news item related to the reconfirmation of Ben Bernanke to remain chairman of the Fed. He was questioned by Sen. Jim Bunning (yes the one who pitched for the Phillies). The Senator told him that he opposed his the first time and now is more upset as Bernanke has deemed most major financial institutions too big to fail. The story of corporate welfare is not new but I think somebody being called out for it is different. Corporations are receiving far better treatment than consumers these days.
That reminded me of an article I read earlier this week. It was about a professor advising homeowners that are underwater on their mortgages that defaulting might be a good idea. Essentially, he said that within 2 years you could build your credit score back up over 660 and have freed yourself from crushing debt. It went on to further say that people don’t and won’t do this because of moral reasons. However, these morals don’t seem to impact the corporations. WOW! Did he really suggest walking away from your house, is the best solution??? It is a strategy.
My job requires me to spend a large portion of my time in a mall. I can tell you that traffic is definitely slower than last year which was slower than the year before. A good part of the economic boom was facilitated by consumer spending. A large part of President Bush’s stimulus plan was rebates to give people more money to spend. The Obama administration has also tried to put money back into the economy. But people are definitely afraid to spend any more than they absolutely have to. So, first hand experience tells me the economy is still in trouble.
Six months ago, the news all seemed to indicate that our troubles would be over in early 2010. But that seems unlikely. So, will it better this Summer? A year from now? Longer? The truth is nobody knows. We can only hope that things improve.
That’s it for tonight. I hope tomorrow’s news is more encouraging.
There are a lot of fun things to do on a Saturday night. Unfortunately, this week I did not choose one of those. I’m watching Saturday Night Live. No amount of past nostalgia can make tonight’s episode funny.
