Is the sky falling?
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by Ron Cruger
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Is Chicken Little in danger?
If I were you, Henny Penny, I’d make a run for it. I don’t know where
I’d run to, but I’d run, because all signs point to the fact
“sky is falling.”
The almost trillion dollar “Stimulus Plan” that is bouncing
back and forth between President
Obama, the Democrats and the
Republicans is beginning to look like a tennis ball at the U.S. Open.
“Whack” and it’s over here. “Slam”
and it’s over there. Whose serve is
It’s no secret that the economy of this country is going
downhill and going
rapidly. And it’s not just a problem for the federal
government. Over 200,000 California state workers had to stay home
this past Friday because Governor Schwarzenegger’s state is
broke. There’s not enough money in the California state wallet to pay
those 200,000 workers. If California was like a “Circuit City” or a
“Linens and Things” it would have had a going out of business
then closed its doors, but being one of the fifty states it’s obliged to
remain in business.
We’ve trusted our
President, working with the men and women
of the Senate and the House to come up with a meaningful and intelligent
plan to stem the
disastrous descent of the nation’s money and
employment problems. The result, so far, has been an announcement that
the first piece
of legislation found that the U.S. Treasury was buying
pieces of banks at the end of last year – and they overpaid by thirty
number cruncher overseeing the government’s initial try at
saving our economy, the $700 billion dollar bailout, estimates that the
Department paid $254 billion for $176 billion of assets – an
overpayment of $76 billion dollars. That’s quite a goof-up. $76 billion
will buy a lot of Big Macs or bagels for the poor and hungry. And
remember, these guys who came up with this investment are supposed
the smartest of the smart in our country.
These same officials, who testified before the Senate
also warned that there should be better oversight of
the bailout funds, warning that some programs were vulnerable to fraud.
that – fraud. They also warned that the $200 billion plan to get
credit moving for consumers was “ripe for abuse” and said that the
Treasury Department should not spend any taxpayer money on the lending
program until it set up safeguards. These officials kept using
“fraud.” Imagine, these experts are using the words “taxpayer money”
and “fraud” in the same sentence! And, to think, the
are all about Bernie Madoff. If these blunders continue Bernie Madoff
and his Ponzi scheme will look like a pikers.
President himself announced recently that even with all
the bailout money being wheelbarrowed into the fancy schmancy offices of
some of America’s largest banks some of them might still fail – and
that means shutting their doors. Kaput, goodbye, aloha. Gives
a guy the
shivers just thinking about it.
The other scary part about the bank bailout plan is that the
giant infusion of
taxpayer money (that reads “our” money) into these
banks for the purpose of easing the U.S. credit market was used by some
same financial institutions to pay dividends, buy other banks
and pay out big year-end bonuses to employees. Somehow I think something
and it ain’t in Denmark.
I’m beginning to have serious trepidation about what’s going
on in our country. It’s getting to
the point where we’re not sure which
is worse the problem or the cure.
The fear of where our economy is headed has sorely
the buying habits of millions of Americans. Many major retailers have
suffered double-digit declines in January. The entire
fell 1.8 per cent last month. If it weren’t for gains by Wal-Mart sales
would have been down 5.6%.
are some statistics for you that illustrate the
adversities in retail – Neiman Marcus, down 24.4 per cent; Saks, down
Nordstrom, down 11.4 per cent; Gap, down 23 per cent;
Abercrombie & Fitch, down 20 per cent; J.C. Penney, down 13.4 per
Kohl’s, down 12 percent. That’s a lot of merchandise just sitting
around. A bunch of sales people with nobody to sell to and a bunch
factories that don’t have to produce anything.
The “Stimulus Plan” as it is written today fills almost 800
I haven’t read all 800 pages, but the “pork” that I have seen
Some of the stuff in the “Stimulus Plan” doesn’t
seem to be
what we’re looking for – to put people back to work and getting credit
flowing in the country.
Check some of
the “Stimuli.” The National Institute of
Standards gets $357,000,000 for construction of research facilities. The
Oceanic and Atmospheric
Administration gets $427,000,000 for the same
The FBI gets $75,000,000 for salaries and expenses. Inside
Weatherization Assistance Program we find “expenses”
of $500,000,000. That’s an unspecified expense of a half billion
for “miscellaneous” things.
This is beginning to look like a playground for kids playing “Fraud, Fraud, who’s got the Fraud.”
country has lost 3.6 million jobs with half of that
total occurring during the last three months. Americans lost 598,000
jobs in January.
The total unemployment is now at 7.6%.
Maybe Franklin Delano Roosevelt had the right idea. Hire
those people who are out
of work and fix our roads, our bridges, build
schools and libraries and repair our dams. Put more cops on our streets.
have this scary feeling that we’re about to spend a
trillion dollars and there’s a strong chance that it may not buy the
cure – and
that would be a monumental blunder.
I know that in a few years America will regain its balance
and get back on track. In
a few years Americans will be flocking to the
Gap, and Nordstrom and J.C. Penney and Kohl’s, but until then I hope our
get rid of the “pork” and pass a “Stimulus”
package that has an immediate effect with a minimum or no fraud.
Our only hope
is for more Americans to keep their eyes on
our elected officials and stay aware of what they’re doing. After all,
it is our money
– yours and mine.
. . .
In a related matter –
in the business section of this
morning’s newspaper, set in small type is a seemingly unimportant report
titled, “Earnings Roundup.”
Listed is a piece about “MasterCard.” It
states, “MasterCard reported a fourth-quarter profit that easily beat
MasterCard shares rose 14.1 percent.
MasterCard’s revenue increased 14 percent to $1.22 billion.
As more and more people
join the ranks of the unemployed are
they now relying on their credit cards to pay their bills? MasterCard’s
fourth quarter report
indicates that our country’s credit problems
aren’t fading away. They’re just changing shape.