Out of Sync

Out of Sync (2/8/2012) Annually I experience the same odd weekend in late January or early February void of understanding the fascination of watching steroidal, beast-like millionaires engage in gladiator activities on a Sunday evening. I think my concern would wash away if the obsessed fans were willing to move from the couch and do more than head to Wal-Mart to purchase corn-syrup enriched foods to add to their excessively high caloric intake. For days beforehand morning and evening news programs beam critical messages to the masses about the must-watch game, cannot wait to be seen commercials, and the over-hyped halftime show. Unable to afford it, but still willing, consumers will purchase new televisions to achieve bragging rights among their friends. Grocery stores peddle mountains of soda and chips at the gateways to their stores and decorate like another holiday has come. On game day over zealous fans will don tribal colors to cheer for their millionaires and some will paint their skin or even forever mark themselves with tattoos. Hilariously, the word “we” will be used more than ever to claim membership on a team although no fan would be allowed near the celebrity players. With 45.8 million Americans on food stamps it is likely the SNAP card will purchase soda and chips to celebrate the day. For an afternoon the unemployed, those facing foreclosure, and many worried about job security will disregard the true American concerns instead asserting this ritual game as more important. Sadly, these same hurting neighbors will know more about the players, their names, hometowns, and meaningless statistics than they do members of congress, their state legislature, or local elected officials. Ironically, many support the “occupy” movements and fall victim to the populist arguments of today, but fail to realize their own celebration of the ultra-rich further distances the classes. While players unionize to find fairness in the absurd revenue generation, the owners are elevated from the lifestyle of their fans by wealth beyond most imaginations. I wonder how many fans realize a player earns more in one season than most fans will earn in a lifetime? So, another meaningless game has come and gone and an afternoon of life was given to further reward those our president is suggesting we despise. Of course, many men will take their sons to football practice to teach them the gladiator like throws, and tackles to hopefully make superstars of them, or more importantly demonstrate their masculinity to their tribal friends. The reward of the annual ritual of millionaire game playing is the small boost to the economy and distraction from woe, but the tragedy is the blind following of the masses being entertained like the citizens of Rome as the empire faces collapse.

Pragmatic

Pragmatic (01/04/2012) Taking my son to school recently I was listening to an interview on NPR with a spokesperson from Merriam-Webster dictionary. I have always loved the dictionary and can remember scouring the unabridged version when I was in school, searching for words I needed to learn and finding words of which I had never heard. Today, I never pick up a printed dictionary and instead relay on a digital search. Companies like Merriam-Webster benefit because in the digital world the company captures data about users, like the most common search. For 2011 Merriam-Webster reported the most searched word is “pragmatic.” Coincidentally, in conversation the day before the NPR piece I was commenting “I’m a doom and gloomer” when it comes to the economy, currencies, resources, or general outlook. My friend Katie quickly corrected me and said, “I don’t think you’re a doom and gloomer; your pragmatic.” Like many of us looking for the meaning of the word pragmatic I cannot say I gave much thought to it before our economic downturn several years ago. In September 2007, I lost my job and found myself selling unneeded items, downsizing through multiple garage sales, and finally having to leave my friends and children in New Smynra Beach, Florida. I started reading, learning, and understanding government, money, commodities, food chains, and even media interpretation of events. Ultimately, this led to my opportunity to write weekly newspaper columns in several papers and publishing my book, Clearly Ambiguous. Encouraged by personal change I started identifying trends and taking an umpire-like view of the world, “calling it like it is.” Specifically I remember a meeting with a group of realtors in spring 2008, part of a leads group I had formed, and the realtors commenting the housing market would return by the end of the year. I challenged their thoughts, stating it would be five to ten years before real estate made any return to the prior levels. Challenged, I stood my ground sharing statistics, facts, and observations. Recent data by the National Association of Realtors has reiterated the markets have been worse than reported and instead consistent with my assertions. Each week I work hard to share events whether identifying infringements on our liberties, disputing economic optimism, or calling out the idiocy of our leaders’ decision making. My friend has accused me of being negative, another of living on the mountain too long and become radical. I think Katie got it right, I am “pragmatic.” prag•mat•ic (adj \prag-ˈma-tik\) 1: archaic a (1): BUSY (2): OFFICIOUS b: OPINIONATED. 2: relating to matters of fact or practical affairs often to the exclusion of intellectual or artistic matters : practical as opposed to idealistic.

Hang 'em

Hang ‘em (12/7/2011) Americans tend to bury their heads in the sand when it comes to government. Sadly a majority cannot name the Vice President, and certainly not the Secretary of State or the Speaker of the House. Thus, this is the reason for referring to “sheeple” or “zombies” to stereotype the average citizen. It seems the career politicians understand this and manipulate the masses for their own gain. The latest failure of the ruling-elite is to come up with budget cuts for the next ten years. The proposed method of manipulation to make this happen was so appalling every member of the House and Senate should be publicly hung for treason against the people. Over the last years, under Obama and prior to the Republicans winning the House majority, Congress has failed to submit a budget. This year with new leadership the Republican majority made a valiant attempt but was blocked by Democrats in the Senate from approving the budget. The new “super-committee” was created to break through the deadlock and find $1 trillion in cuts. What is more important to note was they were tasked with finding $1 trillion in savings over 10 years, starting in 2013. A simple task, right? $1 trillion over 10 years works out to $100 billion per year and the current budget is approximately $3.7 trillion in expenditures (outlays) and $2.6 trillion in revenues (incomes=taxes). A $100 billion cut per year is 2.7% of the total expenditures. Sadly, these ass-clowns running our country could not come to an agreement, but why should they? There are no consequences! Similarly, on November 18, 2011 Congress had a chance once again to demonstrate the interests of the country and the people were more important than their bipartisan bickering. Voting primarily along party lines the proposal for an amendment to the constitution failed to pass. Currently 49 states have some type of balanced budget amendment. Interestingly, the federal government has only balanced the budget six times in the last 50 years, four times while Bill Clinton was president. It is easy to ignore the actions of Congress as most people yawn over politics and turn on a Sunday afternoon football game. However, this past week the Federal debt hit a post WW2 high of debt to GDP (Total Debt/Total GDP) equal to 99.5%. In the next two weeks that number will move to triple digits and will not stop increasing. Interest rates are artificially low and any crisis remotely similar to Europe will drive the cost of treasury bonds higher therefore adding to debt faster. At the same time an economic malaise engulfs the country and GDP based on the consumerism of the threatened American shopper is likely to remain relatively flat. Congress is the only entity to change the course of America right now and it must make tough decisions to rein in spending. Arguments are taking place over taxes, but spending is the first, and easiest, place to cut. For instance: foreign aid, arts, museums, the Department of Interior, Department of Education, Department of Energy, and closing military bases overseas. The ass-clowns running Congress want to ensure they have a luxurious lifestyle based on a taxpayer funded income and pension for life instead of making tough decisions best for future generations. I assert today’s Congress is committing treason as they have become the domestic enemies of our country by willfully and knowingly harming our credit rating, impairing national security through reckless spending, and stealing the wealth of future generations.

Zombieland

Zombieland (11/30/2011) Watching the news last week was absolutely predictable as there was much speculation about zombies appearing on Black Friday to consume meaningless merchandise from China. I am guessing most of the zombies have garages full of past Black Friday festivals, plastic junk hidden away under children’s beds and some may have storage units holding booties from years past. For several weeks the zombies have been fed hype regarding deals on computers, tablets, televisions, clothes, and a myriad of other unneeded items. Last week’s newspapers prepared the zombies so they could map their plans with war like precision. Over the last several years the retailers who feed the zombies have become more sophisticated by using the internet. This allows some zombies to continue feeding on traditional foods at home, Thanksgiving leftovers, and use their computer to kill merchandise with their credit cards and a few online clicks. These zombies feel they have an edge against everyone since they maintain the protection of their homes and can start shopping and killing deals in the digital fantasy world; oblivious to social interaction and breathing fresh air. Not only was the news an accomplice to the zombies, but the media was being fed by our own government. There were reports if the zombies did not consume enough merchandise then the great beast, “The Economy,” would not survive. It appears the annual ritual of zombies appearing on the day after Thanksgiving has become the signal for the life of the beast over the following year. The President himself helped by ensuring merchandise for his campaign was marked down 10% on Friday, giving zombies a new purchasing outlet As stores opened the zombies took to hurting each other: A 55-year-old Marston, N.C., woman zombie who had just finished Black Friday shopping for Christmas presents with her sister zombie and son at Wal-Mart in Myrtle Beach was shot in the foot during a robbery in a nearby parking lot; in Phoenix, AZ a brawl broke out in the video game aisle as zombies madly tore open packages like they contained the cure for cancer; at a Pittsburgh area mall where a hot deal on yoga pants had some women zombies fuming. “Literally, girls zombies were punching each other,” said shopper Liz Wentling, and “girls were literally shoving each other, moms were getting into it.” In Rome, NY zombies at a Wal-Mart injured two female zombies and a male zombie was arrested after fighting in the electronics department. In another incident, a woman zombie trying to improve her chance to buy cheap electronics at a Wal-Mart in a wealthy Los Angeles suburb spewed pepper spray on a crowd of zombies and 20 zombies suffered minor injuries, police said Friday. Black Friday’s ritual has become more prevalent over the last several years, especially as the Beast has been dying. Roosevelt was the first to try to control the zombies during the Great Depression by moving thanksgiving a week earlier to stretch the holiday shopping season in 1939. But it was not until Philadelphia newspapers used the phrase in 1966 did the zombies have a festival day called Black Friday. The mid-1990’s propelled the frenzy to headlines and in 2002 Black Friday officially became the biggest shopping day of the year. Last week approximately 134 million zombies left their caves to kill deals nationwide on Black Friday. As the zombies face the hangover of debt from consuming too much meaningless merchandise retailers were quick to celebrate “the best Black Friday in years.”

Small Town Newspaper

Small Town Newspaper (11/16/2011) Imagine a world where no newspaper exists. Very soon we may live in such a time. Most people treasure newspapers as milestones of current events. For example, in my possession I have framed front page issues of The Chicago Tribune from November 23 and 24, 1963 detailing Kennedy and Oswald's assassinations. History books show pictures of Truman holding The Chicago Tribune on November 3, 1948 announcing his defeat to Dewey. Since the printing press was invented by Gutenberg around 1440, people have used shared printing to record history and news and this the newspaper has been the most popular daily diary of our world. Today, historians scour pages of black and white text to create the synopsis that becomes our history books. However these summaries are swayed by opinion and filter critical details. The average person typically keeps newspapers clippings; I have copies of my high school athletic feats, graduation announcement and other personal milestones. Most of us save birth, death and wedding announcements. In each of these cases without a local newspaper there would be no record. As I paged through last week's paper I read about school children, Council meetings, local sports, and crime. Arguably information is captured digitally via the Web and television, but only the small town newspaper remains accessible to everyone. A March 22, 2009 Time magazine article reported on a Pew Media analysis focusing on the question, “what happens when a town loses its newspaper?” For small towns the consensus seems to be one of indifference other than the loss of primary news sources via the “ecosystem” of local journalism feeding other outlets because only a small town newspaper provides the depth and diversity of local news. Unfortunately, newspapers are closing at an amazing rate, hundreds per year from major cities to the smallest towns. The brick and mortar business model is giving way to a low-cost digital media that many assert will ultimately replace print. As you page through this week’s paper take an extra moment to scrutinize each page, looking for particulars normally passed. For instance, read the crime blotter and note the detail forever saved to the historical record. Around the local section imagine looking back 50 years from now through an archive at the photos and current events of the day. While reading the editorial page’s letters and opinions picture future school children doing research on “The Great Recession” and compiling future history books from the non-digital account of today’s woe. I argue newspapers will always have a place in our world and remain the only reliable method to record history and present opinion. Support for our papers must start via circulation and supporting the advertisers. Patronize the businesses you see in print and let them know it was printed media dollars that brought you to their establishment. Let your editor know how columns impact you and take every opportunity available to contribute editorial content.

Small Town Destruction - Part II

Small Town Destruction – Part II

In my first column addressing the demise of small towns I pinpointed three items I believe are consistent in the recipe for disaster: highway bypasses taking traffic around town, national retailers undermining local merchants, and outdated alcohol ordinances preventing thriving dining. Objective and specific, I believe the slow withering of communities can be avoided and in no way do I question the emotional appeal of charm or the fabric of the community. Expanding further on the recipe to create sustainability several more key strategies, in addition to the original three, can be implemented.

First, tax policy can drive business toward town center through a reverse property tax or by creating community redevelopment districts. Traditionally property taxes are lower in the suburbs, by reversing the millage rate growth is encouraged toward town and away from the outskirts.

Second, mixed-use and re-use are critical to a thriving downtown. For example, a national drugstore or bookstore may come to town, but in place of a new steel and concrete structure replicated nationwide, require use of existing buildings and rehabilitation. As an avid fan of James Howard Kunstler, I must agree with his descriptions of “programming” the content inside the building versus the “container” that makes up the structure. A drugstore could operate from a 100-year old building, thus preserving the unique character of individual towns. Mixed-use and appropriate zoning would allow shopkeepers, or tenants, to live above shops in town center increasing rent and covering fixed costs for the building owner.

Third, discretionary consumerism should be incidental to the town center, not the primary focus. In a struggling economy counting on the luxury purchase of boutique goods will not save businesses. I propose keeping banking, postal, personal care, hardware, and grocery near town center instead of spreading these key needs to faceless strip malls located in yet to be developed suburbs. Consuming luxuries will follow naturally in a shopping district providing necessities.

Lastly, zoning and permit approvals should look toward the future by asking what will be left of this “container” if the business closes or moves. For example one national retailer is notorious for abandoning functional stores strongly anchoring numerous small businesses in favor of trading up to a generic “superstore” version located on cheaper land and incentivized by property tax reductions. Once left behind no other business is capable of using the commercial square footage and the nearby businesses that benefitted from the anchor fold, vandalism grows, and the entire shopping center becomes a permanent blight on the community.

Driving through the rural southeast I see success and failure from the window of my car. A thriving community is easily observed versus the shuttered, empty storefronts of a now dead town. I can’t stop and ask about the “charm” or the “fabric” of the community, but I can see the faces of those pondering what happened and why the town died compared to the success of the community next door.

Higher Education Myth

Higher Education Myth (7/6/2011)

My daughter is 15, just finished her freshman year of high school. Like many parents with a high school student I am carefully watching her grades and doing everything I can to ensure she will make it to college. Over the last four decades the number of students going to college has increased, and so have the costs. I was the first in my family to attend college, earning my way on a scholarship and understanding the path in front of me: attend school, work hard, get good grades, and graduate expecting to find a good paying job. Even in the 1980s I was puzzled by the choice of major some would make, possibly liberal arts related and then wonder why they could not find a job. As an Engineer I was showered with job offers and an excellent starting salary (nearly $39,000 in 1990).

Today it appears college has become an entitlement program, fueled by readily available public financing and a willing consumer unqualified to receive a “real education.” In 2011 the average public university cost will be $20,000 per year, and a private school twice that much. Assume your son or daughter is following their passion into liberal arts and a 4-year degree will approach $160,000 with income prospects of $25-30,000 per year; if they are lucky. Sadly, there is an assumption these students are qualified for education, and more so entitled to a job at graduation. I recently heard this anecdote, “Just because you have a fishing license does not mean you know how to catch a fish, or will catch a fish. College degrees are the same, a piece of sheepskin will not guarantee success.”

College debt in America is now $800 billion and less than 54% of graduates in 2010 were able to find work. The Washington Post reported 85% of college graduates will be returning home. As a father, I must weigh what advice I would give my children and truly wonder, unless tuition is covered by a scholarship, whether college is worth the liability (note, I did not say investment) created. Like the housing crisis and shoddy loans, college degrees are being handed out to unqualified and undeserving students with no prospects of work, but fully guaranteed by the U.S. taxpayer. We must remember a fishing license will not cause fish to jump in the boat, nor will a college degree cause paychecks to fall from the sky.

Defending Yourself

Defending Yourself (06/22/2011)

I wrestled with the title and content of this column realizing I wanted to challenge thought processes. My context is asking, “When would you take up arms?” Recent Supreme Court rulings, at state level and the federal level have eroded 4th Amendment rights. These freedoms have been held sacred since the Bill of Rights passed and evolved from British tyranny and further back to feudal tyranny. Looking around I see this erosion becoming the norm, no longer the exception. Sadly, people who raise questions are now “domestic terrorists” or “troublemakers” harassed through detention, no-fly lists, and watch lists.

If you are pulled aside for additional screening at an airport and suddenly find yourself touched inappropriately by a TSA officer are you willing to yell “Stop!” Are you willing to kick and punch to defend your person? Are you willing to engage local law enforcement to file assault charges? What if you are an 18 year old girl attending your high school prom and security guards run a hand up your bare thigh under your dress? Would you be willing to complain, or more importantly file a lawsuit like Candice Herrara of Santa Fe, New Mexico?

Examples of concern abound. Recent state and federal Supreme Court rulings have changed search and seizure rules allowing police offers more leeway. My question, without cause and absolutely wrong in your view and demanding entry to your home would you let them in? Similarly, what if you are legally and rightfully openly carrying a gun and police officers, not knowing the law, are now threatening you at gunpoint and moving to arrest you, as recently occurred in Philadelphia? What if you were selling unpasteurized milk or free range eggs on your farm and USDA Officials raided your homestead, guns drawn, and arrested you even though no crime was committed.

In theory we are all safe in our homes, our cars, and while traveling. Our founding fathers experienced British tyranny and knew fundamentally they had to protect themselves, their families, and their property. Obsequious citizenry today is leading to a government police state that turns neighbors against each other and infallible beliefs in lawmakers. Sooner or later “Dancing with Stars” will end and a confused America will realize they lost the freedom to defend themselves. Our children will believe pat-downs to attend prom are the norm and police can enter homes anytime. Are you willing to speak up and defend yourself? “The truth is that all men having power ought to be mistrusted,” James Madison.

What lifestyle changes would you make?

Check out this house. Is it worth it? No mortgage, living happy without the fear of a bank taking everything. Depending on where you have been in the last two years financially you may not understand the changes taking place in America.

The Greatest Depression is continuing in a rapid downward spiral with the plummeting value of home prices. Too many Americans have tied their fate to the future of their home. Since 2008 home prices have fallen 33%.

What is a house? How many people thought they were living the dream of a McMansion - 4000 square feet and a $4000/month mortgage?

I will continue on my 1.6 acres of rural countryside - chickens, woods, space, and simplicity. Life is easy when you have less.

Wealth Disparity

Wealth Disparity (5/11/2011)

A drive through New Smyrna Beach demonstrates the extreme wealth disparity that can be found anywhere in America or the world. From the mega-wealth of beachside to the barely surviving poor west of U.S. Highway 1 radical contrasts in daily life are found. It is impossible to look away in a small town and not acknowledge differences, to ignore them would be unconscionable. Like New Smyrna, America’s numbers are mind-blowing: the top 1% controls nearly 33% of the wealth in America whereas the bottom 50% has just 2.5% of the wealth.

Don’t misunderstand me. I love nice things, eating out, a beautiful home, new cars, and a big bank account. As a country even our poorest live far better than the middle class does overseas, but such argument is not cause for turning our backs on the needy. Similarly, the populist envy driven by our current President does not justify excessively taxing wage earners, or the ultra-wealthy. The current raging debate has disclosed the failures of our progressive tax system: envy that the “rich” pay much of their tax through a 15% dividend, and sadly uncovering through subsidies and support programs a single mother of three earning $14,000 per year has more disposable income than a similar mother earning $60,000.

We need the successful to succeed, creating jobs, opportunities, and capital for driving the economy. Simultaneously an understanding and empathy must exist for those who need help. I do not have solutions, but must argue the debate is lost in political rhetoric and desire to drive pet projects. Taxing the wealthy at 100% will not provide enough revenue to fix the government spending problem and it certainly will not lift those in need. Milton Friedman argues in the movie, “The One Percent” the increasing wealth gap is justified because it has also lifted the poorest of poor. In earlier lectures Friedman, in characteristic fashion, shows at least that government creates a perverse system starting with bad schools, limits opportunity through minimum wage laws, and creates dependency via welfare programs.

The political debate from both sides focuses on our tax system and protecting special interests, Republicans arguing to keep tax rates low on the rich, Democrats seeking more. Sadly, both sides view 67,000 pages of tax code as the holy grail of government purpose and fail to understand simplifying the tax system and cutting spending will allow market forces to work toward solutions benefitting both rich and poor.

My two cents...

The fed is between a rock and a hard place:

- no more QE: the stock market will crash, no easy credit, brakes on economy
- continue QE: rising inflation, real wages dropping, angry voters.

Furthermore the Administration is not supposed to be part of the monetary policy but Obama will politically pay for the decision either way.

What should we do:
- keep your gas tanks full (I filled the RV in January, $2.90/gallon, today driving home it is $3.80/gallon -- $60 savings
- keep your pantry full -- anything you buy today is cheaper than tomorrow
- understand the stock market is like going to Vegas. Best trading option is probably futures contracts
- pay down debt that costs more than 6%-8% to improve cash flow. Anything else is about to become cheap money. Free up the expensive money to invest in CD's, dividend paying accounts when interest rates go back to 10-12-14%
- Remember, as interest rates go up bond prices go down. why do you think PIMCO sold ALL of their treasury bonds?
- Remember the government has $4 trillion in short-term treasuries coming due in the next 18 months

The Hydra Monster

The Hydra Monster (4/13/2011)

On Friday Americans will repeat the annual ritual of paying taxes. Local television stations will provide live coverage from postal offices near closing time; editorializing what we “must” do to pay our taxes. Obediently most all of her citizens will have complied and the monster of government will continue living, and regardless of attack she cannot be killed through starvation or even radical cuts. Valiantly some men are trying like Congressmen Ron Paul and Paul Ryan, but attempts to shut down the government and truly kill the monster to save future generations are met with mockery from the press and she continues to live.

Sadly, the Hydra Monster lives at all levels of our lives. We start with our paychecks by enslaving ourselves for the first three to four months of the year to pay Federal income tax (20%) and FICA (7.65%). Sadly, most people ignore the 7.65% raise they would receive if employers did not have to pay taxes “on their behalf.” In Georgia I have a state tax of approximately 3% and there are the other taxes my employer pays instead of paying me: SUTA and FUTA. Adding it all together nearly 40% of our paycheck is gone. In November most local municipalities seek property taxes on those who own real estate, amounts of $5-$15k are averages in Volusia County (let’s assume 10% of income). With every purchase comes sales tax: 6.5%. Adding everything together comes to 55% of earnings. Of course, there are countless fees and taxes on phones, internet, licenses, and registrations further driving up costs.

Taxes anger me because the Hydra Monster called government relentlessly feeds itself on the backs of all men and abusively spends the collected monies. At the national level the monster is so large the President readily acknowledged during his promotion of healthcare fraud and waste in Medicare comes to $1 billion, but the monster lives on. Locally governments build multi-million dollar firehouses on prime commercial property and create pension plans to allow productive citizens to withdraw from the workforce at early ages. In Nassau County, NY policeman earn $100k after five years and are entitled to hundreds of thousands in annual retirement benefits!

Our country is dying, consumed by the Hydra Monster. No matter how hard our heroes try to cut a head she will live on, breathing fire against her people, growing meaninglessly, and adding more heads to become ever more pervasive and invasive in our lives. Radical change is required to defeat the Hydra Monster, only banded together can she be killed. Paying taxes this week is a sad offering to the misery befalls man but will make the Monster stronger.

Destroying Futures

Imagine earning $30,000 (3 Trillion) per year but having bills and obligations of $42,000 (4.2 Trillion) per year. Additionally, let’s assume you have a spouse and two children with wants and desires. With your income falling short you would know radical changes in your lifestyle must be made and if you are a Dave Ramsey fan you know every expenditure would have to be considered and nearly one-fourth must be cut. However, the kids will complain if you cut their movies, food, school activities, clothes and even iTunes budget (government spending). Your spouse does not want to discuss the issue because she feels the problem will go away, as if by magic, and there is no reason to upset the kids (political debate).

However, there is an answer: debt. Of course, a loan to create a source of “income” can be created (deficit spending). For instance, a second mortgage on your home could fund the shortfall and maybe allow you to buy a new big-screen television or car, a hugely popular decision at home. But this only works for a while, quickly you discover the interest only payments add another $500 per month to your obligations, thus you are now using the debt taken on to pay for the original shortfall and the new debt (treasury auctions)! You have looked for ways to increase income, but the economy isn’t growing and no one is hiring (tax revenue). Your anxiety increases because you know this cannot keep going and bankruptcy may be the only way out.

One day however, your neighbor Fred (Federal Reserve) knocks on your door and explains his multi-level marketing business is doing well and as long as he keeps getting new people involved his success will grow and he would like to help you. Hesitantly you agree to his proposal: he will paper over your debt (purchase bonds), and you can repay him in 30-years. Thoughtfully you think his proposed near zero interest rate and 30-year offer has to work. At age 50 it is even unlikely you will be here in 30 years to deal with the repercussions. With a wink, Fred explains your children will assume the entire debt, with interest. After contemplation you feel it is better to risk your children’s future than to reign in your lifestyle today, and hurt their feelings, and since they do not get an opinion (can’t vote) they will never know. Like a deal with the devil, you know there is no way out.

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.”