The Economy Has Moved Past Midnight

Why is everyone surprised about an unexpected rise in first time jobless claims. That writing has been there all along and won't change until small business America gets a helping hand

Time to get our hands out of our pockets

Time to get our hands out of our pockets

I am not one to preach doom and gloom, really I’m not.  I am, and have always been a realist though.  I see things as they really are and I work very hard not to fabricate something that is not there, or make something appear other then what it really is.  What if Captain Smith of the Titanic told his passengers not to worry, the water around their ankles was simply part of the entertainment package.  No, we’re sinking and it is going to be bad.

I am not addicted to any one news channel or publication, I watch and read them all.  I do see different contrast between the channels though and I can’t help but wonder where they get their news from time to time.  I don’t really lean to the right or to the left on political issues, I know both sides have an agenda and in most cases it doesn’t include you and I, until it is time for the bill to be paid.  Politics is a funny animal, it must make you think it is for your best and no other idea will or can be considered, we see this almost daily.

I have been watching the President starting to back peddle on several fronts.  He is now saying that we must do something to help small businesses if we want to bring our economy back.  I wish he had been reading searchamelia on a daily bases, we were telling him this over a year ago.  Now he is saying unemployment may not go below eight percent for the next couple of years; what happened to unemployment will not go above eight percent?

I served in elected office for sixteen consecutive years.  The one thing I learned was never say never, and never make absolute predictions concerning the future.  If you make absolute predictions you may end up with egg on your face in the long run.  Our system of government was meant to include the people, not exclude them from the process.  I think people expect nothing more from their elected officials then honesty, just tell it like it is.  Don’t make it appear to be something that it’s not, this is usually where the egg comes in.

Our economy is not doing too well right now and in my opinion it is going to slow even more this year.  With businesses cutting back and laying off or closing completely, we will see unemployment rise more.  Foreclosures will increase in residential and I don’t believe we’ve even scratched the surface of what is just around the corner in commercial real estate.  I think we will see many commercial properties on the chopping block, all of which will drag the economy down further and the banking world along with it.

Are we doomed to this end?  I believe that if changes and attitudes towards small businesses and a control of the banking system take place we will began to see improvements in our overall economy.  Government can’t continue thinking that it can be spending and others will bail us out of this mess, it just won’t happen.  It is going to be the private sector and small business that can bail us out, but without support from the banking world that idea too is doomed.

Instead of throwing money at the large banks and Wall Street insider companies a loan system should have been set up to encourage growth in the business world.  There is a difference between Wall Street and Main Street, it is main Street, and always has been that has made the difference and will continue to do so.  I suggest that the people who are in charge of making the decisions needed to change our economy all be replaced. It is obvious to me they have no clue what they are doing or what needs to be done. Tim Geithner is obviously in tune with certain companies and insiders he will help out, I don’t think he is in tune with the needs of Main Street at all.  As for Ben Bernanke, not only does he need to be replaced but the Fed should be looked at in the process.  Was the Fed a good idea when it was created in a top secret meeting on the coast of Georgia some one hundred years ago?  I think a monster has been created and is now coming back to ravage us.

Folks, I think we have a long, long way to go and I truly believe things are going to get much worse.  I’m not looking forward to it, but it is simply how I see it unfolding.  Not a pretty picture, but it is how I see it.  I really hope I’m wrong on this one.

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  1. tommylee

    Dear Nick D, as I mentioned before, bailout money is wasted money. The word bailout refers already to jail and those that take money from the people to bailout a happy few based on reasons why they got into the “need” of bailout should stay in jail.

    Too big to fail is a mirage since economics of scale apply to the small businesses as they apply to the large corporations unless you believe that there should be two measuring sticks. One for Main Street and one for Elitists. So asking for money to keep the doors open is as bad an idea for the small businesses as it is for the large corporations.

    Both create hidden unemployment or subsidized employment. If you're asking for money to grow your business based on a proven or shown track record, power to you and you would be absolutely right. But never forget that the money you borrow is actually your own and your neighbor's money and his or her neighbor and so on who put their savings in a “safe” place ad trust those in charge of that “safe” place to do the right thing. So it isn't money created out of thin air but someone elses savings. And a lot of them together.

    Fed money or bailout money is money borrowed from the future. It means it is borrowed against the belief that we collectively will earn that money and we're asking our “country” neighbors to believe that we collectively can earn that money in the future. Other countries, such as China, Japan, European Union, Australia, Mexico, Canada (not the US) make it possible to borrow from the future by putting more money than we actually have into circulation. These countries at some point will say: “WE WANT IT BACK”. So normally that is regulated by the “I OWE YOU” notes or “FED/Treasury bonds” that promise regular payments of moneys borrowed from the other countries, same as your bank wants monthly paybacks of interest and a little part of the principal you borrowed from your neighbor(s) through keeping your neighbor's money in “safeguard”. If not, your neighbor will start demanding their money back from the bank and the bank will start screaming at you that they want it back from you and at some point the bank will point fingers at which neighbor did not pay back what they borrowed. And thus, financing you to just keep your doors open in hopes that everyone around you starts making more money and will have to afford your currently too expensive, outdated, or obsolete services, is as much a mirage as in thinking that corporate USA can keep on selling subsidized cars until the end of time.

    Main street has to do the same soul searching and finding the reasons how and why they contributed to this collectively “Not so big that failing could be an option” United States.

  2. Ndeonas

    Dear Tommylee, I agree with you up to a point. Bailout is not the answer, but supporting growth is. Let's put this in another perspective. A business owner today has plans that would expand his or her business, creating more jobs and increasing their income. They need capital to do this. The obvious place to seek this funding would be the banks, they go and are turned down. No expansion, no new jobs and no additional income. Why would a bank turn them down? They are throwing billions at other businesses, (Wall Steet) why not to the small business owner? I don't think banks should just give money away to people who have no viable plan or perhaps not credit worthy, but I do think it is crime when banks just shut down their role in our economic process which casues the rest of the economy to fail. In my opinion this is the simplest form of “economic terrorism”. If this were done by an outside group trying to disrupt our economy someone would either be shot or go to jail, well? The banks can hide all they want and the government can help them hide, the fact remains that they play a vital role in the economy of this nation and they have failed to do so for the past two years. Am I the only one who see's this?

  3. tommylee

    Well Nick D, There are two sides to the coin. First of all I did not “attack” those that are innovative and progressive and based on proven track record or clear indicators should be turned down. I'm talking about all those small businesses that are simply not reinventing themselves to get out of the hole and just are looking to “keep their doors” open in hopes to continue to do the same old same.

    Let me clearly spell it out: IT IS NEVER GOING TO BE BUSINESS AS USUAL FROM HERE ON!!!! For nobody…

    Financing operational expenses is waste and doomed to fail if you're already failing and are in need of “Bailout” (read my opening statement in the first comment). Those i'm criticizing. Not being innovative and getting onto the same playing field as their potential customers are, is what irks me.

    Unfortunately you missed our website and Social Media Seminar and advise you to attend the next one on February 16 at Indigo Alley 6-8pm because 80+% of all businesses are NOT on the same playing field as their (potential) customers and we'll show you proof after proof why businesses are failing, with or without bank capital.

  4. Publisher

    I need to jump in on this discussion as both of you come from different angles. Tommylee comes from the Austrian Hayek direction which dictates that you cannot spend money you don't have and if your business plan is not air tight you don't deserve a loan. A loan should only be qualified as a sure way to expand and create employment. Not just the hope that things will get “better” eventually. Nick as a small business man has seen hundreds of billions been given to undeserving thieves who created the financial terrorist acts we are currently aching through and sees his business whimper away because his former customers have no money to spend or are scared to spend whatever is left, because who knows what tomorrow brings. The banks don't loan him money or even give him a line of credit. We are witnessing a financial culture that is still dominated by the same people who brought it to its knees, who created a credit score system as an access to easy and cheap money and now manipulate the same system on the downside, literally banning you from any type of credit facility unless (maybe) you pay the loan amount up front.
    Anyway Nick is part of the angry group that I'm doing a feature story on tomorrow called “Financial Terrorism has given a major blow to Democracy”.
    Tommylee is a proponent of using the everyday financial realities to majorly shift the previous credit economy to a balanced economy that fits the designs of our time.

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