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Tuesday, July 7, 2009

Welcome Back to Reality

Now that the Fourth of July is over most of us are back to reality. Back to work - I hope n most cases - but in many cases back to the reality of unemployment starting the day with "where do I go today?" or "what do I do today?" or "where can I earn a dollar today?".

The reality is - as I see it - that the economy is not getting any better and in fact is worsening. The latest new unemployment results for last month were still staggaring. 467,000 plus people are new to the unemployment ranks. Add to those the millions that are still receiving benefits - my estimate over the past 7 months is over 3.5 million. Then add to that the numbers over the past two years that have filed for unemployment, stopped receiving benefits are still unemployed but no longer counted in any census data and the numbers would be mindboggling. Several reports have said that if you include all the unemployed not included in the official numbers our unemployment rate is over 16.5%

Unemployment figures are used to compare this economic "depression" to the Great Depression. One of the major differences between these two, our officials tell us, is that during the Great Depression unemployment was in double digits and we currently are not. Currently not, I ask? You all know that old saying, "liars figure but figures don't lie". In other words we can make the figures be what ever we want them to be but the real figures are reality. So, we have many in our government, media and economists world that believe that to say things are not so bad will cause things not to be so bad. They really believe that, in fact, it was administration policy not to long ago.

The feeling by government, politicians and most media is that the American people are gullible. They think that what people hear in small sound bytes they believe what they read on the internet - it it's on the internet then it must be true - and they believe that the American people have become sheeple.

Well, not so, says I. Those that are unemployoed and cannot find new employment know the difference. They know that things are not getting better or beginning to turn around. In fact, for those new 467,000 things are just beginning to get worse.

For those who had established comfortable life styles and have found new employment but at greatly reduced incomes and are having to give up their lifestyles know the difference. The houses they had they could afford in the past (not investment homes or "dream homes") just thier homes they find are going into foreclsoure not because they over extended themselves but due to the complete economic collapse that has affected all middle and low income America.

Predictions are for a turn around the last quarter of this year. Others predict a turn around sometime next year (a year is a long time) and some predict a turn around sometime in 2011.

Are any of them right? Who knows, I certainly don't know nor does anyone else truly know. It is a guess at best by anyone no matter what their experience or training is.

If the prediction is coming from a specific industry or trade group then it will be weighted in favor of that industry so that an optimistic report will help spur that industry. If it comes from the major media then it appeals to their audience specific and if it comes from government, especially the Federal Government, then it is pure optimism based on creating a new reality by "if I say it is then it is" type of philosophy.

My take on this whole situation if you just look at everything and everyone around you is that we are still in for the ride of our lives. Not only do I not think things are getting better for the masses but they could get more ugly.

The Fourth of July was a wonderful holiday. It gave us all the break we needed but now it is back to reality.

I believe the solutions lie in those affected joining together and finding solutions and offering up solutions to our politicians.

To get out of this problem we need the cooperation of our Corporate America. They need to be a part of the solution and no longer be the probelm causing us to look for solutions. Our banking system in particular and our oil industry in particular.

To our banking system I say, stop your greed profit taking. Work with people to help them not to force them into more distress. Lower interest rates on mortgages and credit cards. After all you have sold most of them anyhow. YOu don't own the debts for the most part but evidently you keep the higher rates since your investors are only expecting the original lower rate.

Lower mortage rates and mortgage loans. You are doing that anyway by foreclosing, getting no interest on that loan and selling the foreclosure at amounts less then what the origianl homeowners could pay and would be willing to pay. A self interest way of doing business and certainly not reaching out to help other Americans.

As to oil companies, drop your prices. Not to many months ago a barrel of oil was around $37 and the oil companies posted their highest profits ever. A gallon of oil was down to $1.50= range. Consumption was down but profits up. A gallon of oil is higher now not because oil is costing more - a barrel of oil is $67+ is due to speculators driving up the cost - but because it is mere profit taking. All reports have it that we have a surplus of oil. What was the true cost of that surplus? Should we not be paying based on that cost and the normal markup?

When all forces are working against the common good of the common citizen then this crisis, I believe, will continue for quite some time to come. I am not even sure that at my age I will live to see the end of it. That is not a very optimistic outlook for my kids. What does the future hold for them in this country? Will they enjoy those same benefits of Democracy and Capitalism that my generation enjoyed - before the excess of insanity began just a few short years ago.

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