LC’s Commentary

Listen To The Voice of Reason

Down and out

In Times Like This

In times like this, what is the right course of action? What concrete actions should be taken to get the desired results, in the shortest length of time, with the least disruptive consequences to the US economic system? What will right the economic boat? The only way to right the economic boat is to correctly ascertain what caused it to capsize in the first place.  It is difficult, if not impossible, to implement corrective actions if actions are based on false assumptions. It is akin to being off course in a plane or ship and attempting to make corrections without knowing what the correct course is in the first place.

 

It is apparent to almost anyone remotely interested in economics that our capitalistic way of doing business is in shambles. Some place a large share of the blame on the housing market meltdown and mismanagement. Others place a lot of the blame on greed and excesses in all levels of society. One thing is sure, we will never get everyone to agree what caused the problem, nor will we get everyone to agree what is the best and wisest way to fix the nation’s economic problems.

 

If we expect our way of doing business to survive, we must fix it. Propping it up is not the same as fixing it. There are signs indicating this is exactly what is happening. Some aspects of our financial system are being propped up so a segment of society will not lose a lot of their investments.  Keep in mind, much of this is being financed with borrowed money, which means debt. 

 

It is amusing to hear financial analysts lamenting about the credit market drying up, while at the same time suggesting too much credit, gotten too easily, is the root of our economic woes. People with limited knowledge of our economic system are getting a mixed message. If you go into most banks, the first thing they steer you to is some kind of borrowing program. Banks are also in the saving business and should encourage their customers to save before borrowing. Currently lending institutions are giving very low returns on their savings products. As a result, many people are reluctant to invest at such a low rate.

 

As the job market dries up and the unemployment roles grow at a staggering pace, people are going to have to make some hard decisions. Which bills will have to be neglected? What will the family sacrifice as it attempts to stay afloat until the job market improves? Will the cell phone, cable television, satellite disc, and Ipods have to go in favor of keeping a roof over their heads and food on the table?  Will college have to be put off until things get better? Will children have to be taken out of private schools and re-enrolled in public schools? Will the car have to be driven a few more years before it is traded in? There are many questions that must be asked and answered before one can truly ascertain how to go about the business of dealing with the current economic meltdown.

Some people say they are praying about it and leaving it in the hands of the Lord. I strongly suggest taking actions on your own as you pray. Prayer certainly works. However, doing something on your own works, too. In times like this, one must take advantage of every legal mean to keep the family afloat until those in charge of our economic ship uprights it.

Advertisements

January 25, 2009 - Posted by | borrowing money, Failed economic poicy, Politics

1 Comment »

  1. I agree with you on this, tough times indeed. Having been involved with the communications side of things, I’ve seen people making those choices about which services to keep already.
    Here’s an interesting report on telephone penetration (which seems to be dropping among Americans): http://www.newmillenniumresearch.org/archive/Sullivan_Report_032608.pdf

    The good news we get from this report is that low income members of society are using their (prepaid) phones to good effect in earning money. We will probably see this trend of people switching to prepaid cell phones continuing as long as the economy is in a shambles.

    Comment by jonnoboy | January 25, 2009 | Reply


Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: