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Saturday, July 13, 2024

Mourning in America

Many residents of the small Blue Ridge Mountain community that I call home in Southwestern Virginia work at the Volvo truck plant in nearby Pulaski.

Or at least they used to. Too many of them now eat breakfast at the restaurant near my office and scan the want ads, looking for work to replace the jobs they lost just as Christmas approaches.


Many residents of the small Blue Ridge Mountain community that I call home in Southwestern Virginia work at the Volvo truck plant in nearby Pulaski.

Or at least they used to. Too many of them now eat breakfast at the restaurant near my office and scan the want ads, looking for work to replace the jobs they lost just as Christmas approaches.

A vendor who supplies my web hosting data center in Blacksburg, Virginia, told me the other day that our local telephone cooperative is so slow in paying its bills that his company now demands cash on delivery (C.O.D.).  A city in Georgia that I did some work for several months ago still owes me money from the job.

America is caught in a paradox. 

Too many with mortgages now owe more than their homes are worth. Too many worry if they can put food on the table to feed their families. They look at billions of their tax dollars going to mismanaged banks and auto companies and wonder if they can scrape together enough to buy a few Christmas presents for the kids.

Yet polls show they have hope in President-elect Obama and feel the future will be better than the immediate past.

For too many, hope in an uncertain future is all they have left.

America is at a crossroads and the next turn is neither certain or a guarantee of a cure for the future.

Some say let the auto industry fail and declare bankruptcy. Others say we can’t let that happen because it could put up to 2 million Americans out of work. But even if the government comes to the rescue, at least 1 million will lose their jobs in a mandated reorganization.

Still others say America’s role as a major economic power in the world is over and, in the end, we have only ourselves to blame.   The government, business and most consumers live on credit they can’t afford and mortgage the future on a reckless gamble that the future will bring salvation.

At a store the other day, I watched a young mother use four different credit cards to pay for $2500 worth of Christmas gifts. Each of the cards were too close to their credit limits to pay for the items by themselves so she spread the cost over four cards.

Businesses that exist on lines of credit find themselves cash-strapped as banks clamp down.

The government deficit stands at an all-time high and will get worse if proposed economic recovery programs percolating within the incoming Obama administration and the new Congress become law.

Can we spend our way out of trouble? People with PhDs after their names claim we can.  I’m not an economist but it seems to me that what Uncle Sam wants to do is use several new Visa cards to pay the bill on a bunch of other maxed-out Visa cards.  It’s smoke and mirrors.

So what do we do when the smoke clears and the mirrors break?

I’m not sure what the future holds for America. I’m not sure anyone else really knows either.

13 thoughts on “Mourning in America”

  1. Warren, first of all, sorry that you are a victim of idocracy and corruptocracy.

    I’ve been around for awhile and I recall a number of very difficult times for America, but our financial problems today have a new array of associated issues as compared to the past.

    When we consider just the population differences between 1929 and today, well, it’s pretty awesome. Our economies are different, our techologies are different, our connectedness to the world (in so many ways) is different.

    Warren, I don’t have all of the losses that many have recently been slammed with. But, believe me, my retirement has been hit hard enough that it will completely alter my lifestyle. I’m still in a more secure situation than many and especially those who are in their 20s through early 50s.

    But, albeit, I remain to be so very confused about what is right and wrong about how this country moves forward to reach some resolve not only in our finances, but with our government.

    I will say that I do lean way toward your positions, but again, that’s an easier set of positions for me to take than those who are struggling everyday trying to piecemeal out a living. Even though I feel like that I’ve paid my dues and that I’m ready to finish out my life with some peace of mind and secruity…it’s just not going to be the way I had worked for nor invisioned. Everyday life is going to get tougher, more guarded, more monitored and rigid.

    But, in order for our nation to move on, I think you are right about the big companies that are in critical condition head in the direction of mergers and acquisitions. That would stop the residual bleeding in all connected areas.

  2. On the home-front issue:

    I was laid off last week. I work in the semiconductor industry, a notoriously fickle, cyclical industry. Business is down terribly. The stock of the company I worked for has dropped by 2/3 in the past two months. So far no semiconductor company has gone pleading for a government bailout, as far as I know. I would not ask for one. Some companies will make it through this mess, some will not. It’s going to be very rough for me, personally. But bailouts are not the answer. The answer lies in mergers and acquisitions among the most efficiently run companies to create more viable suppliers for the future.

  3. On the bank bail-out issue:

    We are institutionalizing financial irresponsibility. We are rewarding past irresponsibility with money borrowed or printed.

    The borrowed money will come back to haunt us as more debt that we already can’t afford. China is telling us they aren’t going to absorb any more. What happens when the rest of the world follows suit? That isn’t far away. Our national debt credit card is max’d out.

    The printed money will come back in a far more insidious way. The FED has printed about 2 trillion dollars and put it into the banking system, in the hope that the banks would loan it. They haven’t. They stuck it in their vaults to bolster their reserves. What happens when they finally let loose with that money? HYPER-INFLATION. You think Brazil had it bad? All of your stashed money, whether in banks or in your mattress or in dollar-denominated investments will be severely devalued. We already have $3 loaves of bread. We’ll see $30 loaves of bread.

    Enough with the banking system bailouts!

  4. On the Big-3 bailout issue:

    The argument is made that all hell will break loose if they are allowed to fail. FALSE! Americans will still need cars, once this mess is over, and it will be over inthe near future. Americans will still need about the same number of cars, as they have over the long haul, and for economic reasons those cars will still be made mostly in the U.S. They just might have different corporate names attached to them.

    The argument is made that all of the supporting industries, including parts suppliers and the dealer networks, will suffer huge job losses. Again, FALSE! The parts suppliers will just be supplying the same number of parts, but to different name plates. The car salesmen will just be selling different brands.

    The claims of economic disaster if the Big 3 are not bailed out are bogus. Consider the alternative. The Big 3 have already failed. GM has been courting bankruptcy since well before the current economic slump. The economic disaster will occur if we continue to pour good taxpayer money after bad into badly managed companies.

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