How Bad Is It?

I watched the President’s speech tonight – all 12.5 minutes of it. It doesn’t sound good. I almost expected him to say that an asteroid was headed for planet earth and we are all doomed.

Nevertheless, scanning the headlines over the current economic crisis, I get this extreme sense that we’re not being told just how bad it really is. Here is a sample of those headlines:

Buffett Buys Goldman Stake in `Economic Pearl Harbor'” – Bloomberg.com
“People should be more scared than mad, Paulson says”Politico.com
“Jack Welch says U.S. faces ‘deep downturn'”Reuters.com
“Bush Urges Quick Passage of Bailout Plan to Avert Recession”FoxNews.com

The older I get, the more risk averse I get and that usually translates to my tendency to make pessimistic statements. It drives my wife crazy. So much to the point that she bought me one of those “Half-Full” T-shirts. Late last year I started using the term the coming “financial holocaust.” That really drove my wife crazy.

Now that the President has taken to the national airwaves and the Congress is basically heading into an emergency session and the headlines continue to pound out crisis headlines, you could say I’m more than a little pessimistic.

So I’m going to open this post up to our readers to see if anyone has anything positive to say or can at least give us another Y2K lesson on preparedness.


Comments

  1. From a standpoint of the upcoming election, I am not worried. In a rough economy….and a potential (though not probable) meltdown in the financial sector….this is a 2 point race. Politically, that is damn near a miracle.

    The take-away is that most American voters are not comfortable with Barack Obama…and in fact, that many voters intensely dislike him. Likeability will trump just about everything else in presidential politics.

  2. nightcrawler says

    Each of us will view this economic crisis through our own prism. Many people lower their risk tolerance as they age. It is only natural; there simply is not as much time to recoup losses. The financial regulatory agencies have very strict rules about selling risky assets to seniors and for good reason. What really makes this situation different is the absolute contraction of capital. Americans are not savers; we tend to buy things on credit.

    Take away credit and operate essentially on a cash basis and the pretenders are quickly exposed. Small business cannot start, cars will not be purchased and homes will not sell. Watch small financial institutions collapse and 401Ks shrink and people will soon move their money to Bank of the Mattress. This in turn will cascade to all the countries that export goods to the US and the world will be in a recession. People will get agitated and that is how wars start. In summary, the free flow of capital is what makes us the leaders of the free world. Three words to live and learn by…follow the money.

  3. Jon, US voters are blaming Republicans for this mess by a 2-1 margin. I think you might want to reconsider the affect it will likely have on the election.

  4. I’m not worried. I hear Mr. Potter is offering to buy shares in the Building and Loan for 50 cents on the dollar. Cash!

  5. Is Mr. Potter running….? That’s a good point, a whole new thread could be “Who is OUR Mr. Potter?”, is it the taxpayers, is it Warren Buffett, is it China et al?

    We will get thru this. I’m reminded of the scene in an old Cher movie, she slaps the guy square across the face and yells, “Snap out of it!” We built a lifestyle on credit and called it a birthright. Accumulation of wealth, or the perception of such, trumped everything.

    It is a wake-up call to our responsibility as voters, taxpayers, and owners of this freedom requiring us to stop being passive parasites of prosperity and active workers in our recovery.

  6. “Greed is good.”

    – Gordon Gecko

  7. It is a good time to save.. cash if you can, gold, silver, lead…beans, sugar, canned goods, barter items that won’t go bad, like aging whiskey.

    If young enough, a few thousand shares in AIG might be a winner..someday.

  8. I am sure that I share the confussion of many readers on how we got here. I have read most of the reports that try to explain what has happened, but it appears that the main cause is a sense of entitlement that has grown in our culture and the government’s belief that the best way to take care of the less fortunate is to give them something they didn’t earn. As for the bailout, I do not know what to think about it. While it appears that something needs to be done, supporting a taxpayer funded bailout makes me feel dirty. However, I am optomistic about the U.S. We have weathered more difficult storms than this one and always come out on top. While I am afraid that policies put forth Obama and the Democrats in congress will do more harm to the economy than could, I do believe there is a bright spot if he wins the Presidency. Obama will become our generation’s Carter. Unfortunately, many in my generation do not remember how bad the economy was under Carter and how the policies that he advocated, the same policies that are being put forth by democrats today, devestated our economy. However, Reagan came along and was able to communicate free market principals and advocate for lower taxes and a smaller government. So, my bright spot is that we have survived before and will survive again. In the meantime it will allow those of us that believe in the free market to point out why big government is bad and why Obama and other dems need to peddle their ideas in Europe.

  9. I have an old mattress the cat peed on; would anyone like to shove some money in it as I prop it up in the garage with a sign on it saying Kit Katz Savings and Thrift?

    Wiz Bang People, look up cuz that’s the sky fallin’ on top of the bank sign, with the FDIC logo on it.

    DSW— great graphic LOL… Either you laugh or ya cry huh?

    Now would ya have guessed that being a survivalist with a bomb shelter, tins of tuna and a nifty can opener would be all the rage?– who knew?

  10. hahahahaha Iris that was terribly funny.

    You know my great aunt taught me how to save things. Drips of water out of a leaky faucet for the mint outside the kitchen window, tacks and nails in a jar in case they are needed later, how to garden and grow good food, “if its yellow let it mellow..”, walk if you don’t have gas money, and old clothes keep you just as warm as new ones.

    I dont know what is going to happen to us in the next few years. I sure do know that we should have been thinking about the economic security of our nation and not nationbuilding around the planet.

    This is the greatest country with great people. We need to not forget that we have come through hundreds of crises of our own making (and those of others) to only surface with innovation and with kindness and courtesy of helping each other.

    And yes, the government has a role in THAT…and should.

  11. By the way, Mr. Reagan, that 2 point lead just does not exist…Its 4 percent in a poll of polls and other recent polls have it up around 9. Obama is also above 50% which is a major deal.

    What this crisis is all about is a host of things that I think many of you agree with in a way.

    The financial crisis was on this administration’s watch, just like the mess in Iraq, and the poor economy (jobs, etc.).

    The lower taxes, lower regulation, and lower spending just doesn’t work. We can argue whether conservatisms mantra was followed or not, but if that is the case, then virtually none of your elected officials should be back in office and you should replace them with GOPers that practice what they preach.

    Truth is though, lower regulation means excess and poor judgement wins out and we pick up the mess later.

    Lower taxes means lower revenues period. You can’t sustain growth on no infrastructure, at least for not very long.

    If you have lower revenue, you have to spend less. Means less of what many Americans want (health, roads, schools) but it also assumes your party will actually spend less.

    This has been the biggest spending administration in history. They just spend on things you agree with and I don’t.

    So, we have a deficit…a massive one. Somethign that I abhorred when I was a republican, but that GOPers seem to embrace somehow now.

    Anyhoo, conservatism is flat out dead. Dead. Kaput. Gone. All that is left is a large number of people that want to keep more of the money they earned and keep the benefits that government gives them too.

    Maybe I am wrong. Maybe what was most right is that the GOP philosophy is really about consumerism…having more of your cake, eating it, and asking others to bake you a new one when you run out.

  12. nightcrawler says

    kral,

    Keep in mind the a whole lot of the Wall Street financial folk are dyed in the wool Democrats. This bailout is as much for them as anyone else.

  13. Well, my bank just went under. Guess we’ll see if this FDIC thing works (thanks FDR and your excellent big government ideas)!

    George W. Bush is going to go down in history as the worst president this country has ever seen. Worse than Hoover, worse than Grant, worse than Harding. Failed ideas. Failed management.

    Raise your hands if you agree:

    This country can afford to recover the economy while continuing to try to hold together Iraq with masking tape.

  14. Unfortunately, I have come to the conclusion that Krawl, Klute, and others have no sense of history and are comfortable parroting the democrat talking points. The daily tracking polls Gallup and Rasmussen had the race tied or Obama by two. Know your facts before you open your mouth.

  15. “Know your facts before you open your mouth.”

    I find this funny, especially since it comes right after this:

    “The daily tracking polls Gallup and Rasmussen had the race tied or Obama by two.”

    Gallup: Obama +3
    Rasmussen: Obama +5
    Hotline/Diaego: Obama +7
    Research 2000: Obama +5

    And I’m asking a simple question, John:

    Can the United States afford to bailout Wall Street and continue with the wars in Iraq and Afghanistan? Yes or No? (if you’d like, you may also show your work).

    And I’ve a great sense of history, which is why I mentioned Harding, Grant, and Hoover (and not Nixon – who was, in my book, awesome – one both a governance level and a comedic level).

  16. Klute is right and I am not peddling Demo talking points. This is just plain true. Conservatism is dead. Gone.

    You had eight years of near total control over the government of the United States. Conservatives were in major positions of power. They had a chance and put the philosophy of conservatism into play.

    It didn’t work. You can’t control your own spending, you can’t do anything but nation build, you can’t practice fiscal conservatism, and you can’t even stay ethical as a party. Meaning, all that talk about following the rule of law is also just not true.

    So, in the end, you have John McCain…JOHN MCCAIN…telling you that he is the real Reagan conservative and US that things will be different and that conservatism would would under HIM.

    THATS your campaign.

    Conservatism is dead.

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