Recession? What Recession?

Well, it's been a month since I last posted, so I figured I owed my readers something - unfortunately, there isn't much of significance.

Sure, I could post about the bailout of the auto industry - a bailout, that if you read any of my past posts, you would know, I do not support. If they truly had issues with running their company, they should do what the individuals in this economy are being forced to do - foreclose - file for bankruptcy protection and move on with their day. And sure, I could rant about their usage of private jets to fly to Washington D.C. to beg for the $25 billion they think is owed to them, but honestly, A) that's old news - it is reported they will drive the next time and B) what will my ranting do, except upset me?
Oh sure, Ford now says they can "manage" without the government bailout - all they'd ask is for $9 billion be "set aside" for them "just in case" they need the cash. I could easily write about how they came up with that dollar figure - I mean, honestly, 9 BILLION DOLLARS? What makes them think that is what they'll need - even though they "say" they can "manage without it?"

Yes, I could write about all of that, but instead, I will focus on something more broad - the economy as a whole - as you may have read or seen on television - we are now "officially" in a recession - a recession that started, or so they now say, a year ago.

The problem I have is with the "official" report, well, first off, individuals aren't in a recession unless their job has been lost or their mortgage payment has become unmanageable. It is a very sad fact, but also very true. For those that can make their mortgage payments and are currently still holding down jobs - well, for those people, there is no recession - and that has been made evident with the stronger than last year's (when the recession has now been said to have "officially" began) "Black Friday" sales numbers. I read that the "average" consumer on Black Friday has spent $372 on that day this year - which is up from last year. Leaving me to ask, what recession?

Secondly, why has it taken a full year for the government to finally report that, yes, we are in a recession? It seems the same thing they did with the mortgage crisis - ignore it, it will eventually go away; if not, well, we can always go back and say when the "real crisis" began at a previous date. Why is it they (the government officials) feel so compelled to lie to the American people about things such as this? Why not shoot the average person straight (we all know Cheney is a good shot anyway)? Those with half a brain can see the stock market (for whatever reason this is the benchmark most economist use to measure such things as a recession) is dropping - and that the economy, at the very least, is dropping - likely into recession-like-figures.

But then, I am reminded by my first paragraph - is it truly a recession unless you, or I, or Joe Average Citizen is in one individually? Does the whole of the economy really plunge us all into a recession if we can still afford our bills, and we still have jobs? Sure, we can feel fear at the prospect of losing our jobs; and we can even feel fear that we might not get that Christmas bonus or that raise this year - but we have jobs, and the price of food (or gas - trust me, it will go back up again) hasn't gone up nearly enough to devastate those that are fiscally responsible - and, of course, assuming they still have their jobs in place.

So where does that put us? Are we truly in the recession that is now "officially" being passed along to the citizens? Are all those people that have spent more freely this year over last on Black Friday increasing their credit card balances - hoping that all will work itself out if they just ignore it? - or are people truly spending more freely because they actually HAVE more free cash?

Perhaps they are simply ignoring the "economic indicators;" perhaps they all are now of the mentality that "it doesn't matter." After all, all their hard earned income - all of it is taxed - and those taxes are used to fund the crooks in the big business. Maybe, just maybe, the average citizen is deciding for once to live for today - to enjoy what they have now - before the government or the crooks of the big banks take everything they have once and for all.

Recession? We don't need no stinkin' recession!

Historical Day

Don't get me wrong, I don't like the way the media throws around the term "historical day" for every election, but today is certainly different.
Today we have a chance to dictate history through our election selection - whether it be the first black president or the first female vice president.
Whoever wins today's election will have a lot of work ahead of them in fixing the disaster that was the past eight years. Hopefully, we the people can elect the better leader, the leader that will implement change - someone that will bring back the stability that the American people have grown so fond of and have lacked dearly during the Bush administration.
Today is a historical day, indeed - but more than that, it's a vote to make a change in this country; a change this country badly needs right now in its time of uncertainty. Today is not about the history of the election, but about mending the future. Hopefully, the right candidate for the nation as a whole can come out victorious - for America needs some stability in the Commander in Chief and as a nation.

Reverse Robin Hood?

So I was reading this article the other day, and I have to wonder - are they stealing from the poor to pay the rich?
The premise of the article states that of the $125 billion of taxpayers money used for the bailout thus far - approximately $50 billion of that is being used for ... executive bonuses!!! Not creating new credit lines, not to those mortgages at high risk of foreclosure, and not for anyone that might, actually NEED the money - but for the executives - to, as far as I can tell, make sure they are still wholly compensated for their drowning business and sinking stock prices.
Which leads me to the point - is this the exact opposite of everything Robin Hood stood for? Think about you, we are all taxpayers, that's true, but why are the majority poor being forced to fund the minority rich in this nation? Oh, sure, the article argues (and quite satirically, I do assure you) that the executives surely cannot be forced to endure a life on a mere $80,000 per year, and thus require these additional fundings for their bonuses. Yeah right, tell that to the single mother of three that brings in $25,000 a year and is barely managing to keep food on the table. Yet, this mother of three is the one who is being forced to continually fund the extravagant lifestyles these highly overpaid executives have grown accustom too - and it is a true travesty that we, the "regular Joe's" (i.e. the MIDDLE CLASS and BELOW) must be the ones to fund these executives compensation packages, when in every one's estimation, they are the greedy individuals that prompt this "credit crisis" to begin with. It seems they robbed the poor to get rich by selling subprime mortgages, only to rob the poor to bailout "their company," or more plainly, to bailout their compensation as their stock portfolio's decline in value - and all thanks to these crooks. Glad the government is truly looking out for the people - oh wait, I'm sorry, they aren't, they are looking out for the next great paycheck themselves - the lobbyist. It's a shame.

And now, McCain has been bashing Obama for his alleged "socialist" views, but McCain supports action similar to what is being spoken about above. At least Obama wants to tax those wealthy individuals more and tax the MAJORITY poor less. Why that is not a good plan, is beyond me, but the Republican party has resorted to smear campaigning in calling Obama every name under the sun (socialist, Marxist, even Muslim and terrorist - see Bill Ayers, etc., etc.). Yet, all McCain wishes to do is give a free tax-ride to those who invest in the stock markets - so essentially, those already stealing so much from so many "regular" taxpayers will be able to continue stealing from those taxpayers, as their investments increase in value, and their tax bills diminish due to not having to pay a capital gains tax. Sounds fair to me? How about you? Obviously, I am being facetious, but honestly - we do need change, and I feel Obama may be able to provide such change.

It is a true shame that this bailout was essentially force fed to the American people - and to the senators and congressman that voted on the bill. No one had a choice but to pass the bill, and on the second vote no less - in the court systems, a second vote on matter of guilt or innocence is called double jeopardy, and it is illegal, yet in our highest office, it is, apparently, normal practice. And all for what? To bailout the rich, to keep them living the life they know and love - the majority poor in this nation would give anything for a chance to just not have to worry about where the next meal is coming from, but the executive crooks can't even bear the thought of giving up their private jets and champagne parties. A travesty that needs to be corrected.

So a day before the election I call for change - who will stand with me?

Let's Spread the Wealth Around

This is the term that Senator Barack Obama was criticized by Senator John McCain for saying last night during the presidential debate. Read it again - Let's Spread the Wealth Around.
Senator John McCain is trying to spin this quote in a negative light, but let me examine this five-word phrase and break down exactly why McCain is wrong in his criticism.
For starters, and the most obvious, by McCain saying "this is the wrong way" sure sounds like McCain has an interest in NOT spreading the wealth of the American people around. Seems to me that Senator McCain thinks the wealth is right where it needs to be - with the wealthy. Obviously, if you look at McCain's position on taxes, well, he's looking to suspend capital gains tax (tax on gains in stocks by investors) and even to provide full write-offs for stocks that lose in today's economy. Sure sounds like he is looking to keep the rich, rich, while kicking the poor and middle class before they ever have a chance to catch up.
What Senator Obama is saying with his statement of "let's spread the wealth around" is exactly that - let us tax the wealthy (those making over $250,000 per year) more - and for anyone making less than that, tax them less - effectively creating a more balanced economy - the wealthy can afford more tax, the middle class and poor cannot. As Obama said last night, he will cut the taxes for 95% of the American workers - only those earning more than $250,000 will see their taxes increased - or 5% of workers - something tells me that 5% can afford it a slight increase in taxes.
So, to me, it makes only too much sense, and the fact that Senator McCain can go on national television and say something this absurd and to not be absolutely blasted and ridiculed for it, is ridiculous! He only wants to keep the wealth where it currently is - with the wealthy few - and he doesn't care at all about the "little guy" - the middle class.
I think Chris Rock said it best on Larry King Live - who are you going to trust to keep you in your home, the guy that doesn't even know how many homes he has, or the guy with one home? That answer should be clear.
I may not believe in everything Senator Barack Obama stands for, but I have to do what is best for me, and for me, I need to have more money in my pockets as the cost of living continues to rise exponentially - but I still cannot believe that Senator McCain can criticize Senator Obama for wanting to spread the wealth among the citizens of the United States and for no one to simply recognize his criticism for what it is - ludicrous.

Where Do the Motives Lie?

I am not a fan of the bank bailout, I believe that has been established. However, I believe I am even less of a fan of it now.

The problems run deep. First, when the government buys up shares (the government holding stake in any private company is enough to worry me, but more on that later) it will effectively inflate the share prices on the stocks they buy up. And then, of course, how long will they hold those shares for? And what happens when they do (if they do) finally sell them? Will they put a glut of shares back on the markets - thus causing the stock market to crash again - and what, maybe we can write up another bailout scheme?

But wait, I'm getting ahead of myself. The question that remains is how are they going to buy these stocks? I'll tell you how, it's by printing more money - read this as: increasing the abundance of U.S. dollars in the world - and what does that do? It's simple, the dollar that has already grown so weak, becomes even weaker - with more money in print, it becomes worth less over the long haul. So then they do buy those shares back (at a time later to be detailed?) and fine, the dollar will go back up, but as I said previously, the stock market will crash again, so what came first here, the chicken or the egg? Somehow, some way, the government is doing the free market a disservice.

Let me forget about all those technicalities, however, and move into something much more frightening - the government is growing too powerful. It is no longer the voice of the people. Think about it, the government is buying shares of stocks in private companies - do you know what that equates to? It means the government, our United States government will have OWNERSHIP stake in these PRIVATE companies. What could be worse than that? Now there is talk of them potentially buying up shares of General Motors (GM) - and what will that do exactly? Fine, preserve jobs in America, yet, isn't the government a proponent of outsourcing? If they truly wanted to preserve American jobs - send the Mexicans and other illegal immigrants home - but of course, that would "cost too much" and is "impractical", right? Yeah, because $700 BILLION to bailout private companies is chump change.

Back on point - I read today on Yahoo Finance that $250 Billion is presently in the works to buy up shares of stock from leading banks, quoted as follows:

"Nine major banks will participate initially including all of the country's largest institutions, he announced, in a move that sent stocks soaring on Wall Street.
Some of the nation's largest banks had to be pressured to participate by Treasury Secretary Henry Paulson, who wanted healthy institutions that did not necessarily need capital from the government to go first as a way of removing any stigma that might be associated with banks getting bailouts."

Stop and examine this quote for a moment and lets highlight some key phrases:

1) "Some of the nations largest bank's had to be pressured to participate" ... excuse me? So the government is pressuring banks to participate in this scheme, whether they want to or not? That seems to be adding more power to the government and the role that the government was supposed to play in this bailout.

2) Henry Paulson "wanted healthy institutions that did not necessarily need capital" - so now, not only is the government "bailing out" those banks that are nearing collapse (if not for the government intervention, as they'd like you to believe) but now they are buying shares (ownership) of "healthy" banks that don't "need capital"? Okay, you lost me again - if this bailout is supposed to be used to HELP those institutions from COLLAPSE - why pump the money into 9 of the largest banks who - by phrasing of this article - may not even NEED the MONEY? Seems again, the government is overstepping their boundaries - and increasing their power even further.

So naturally, what does this mean for us, the taxpayer? It is simple, there is nothing we can do about it. The government (the all-powerful wizard of Oz) has spoken, and we have no choice (in this democracy) but to accept the government's decisions that are meant to "help the average citizen," of which, I am still missing how this bailout helps the little guy, especially now that the taxpayer's money is going to "bailout" completely healthy institutions that aren't even in need of the capital injection.

When baseball players get "capital" injections it's called steroids, and it always comes with a side effect - I can only imagine the side effects we are going to feel from this bailout. Either the government will do more harm playing with the free market - or they will grow far too powerful, more powerful than our forefathers ever planned for the government to be. The process has started, I wish there was some call to action that could stop it now.