Notes on a Bad Economy

by Pa Rock
Citizen Journalist

There are different ways of judging the health (or lack thereof) of the economy. My father, who is invested in real estate and the stock market, tends to see the Dow Jones as the basic barometer of our nation's health. Coming at it from a social work perspective, I give more credence to tangibles like housing foreclosures and joblessness. The past two years have seen all of these indicators head toward the toilet, so my dad and I can both agree that things are bad regardless of our unique perspectives.

Today was a terrible day for the American economy. All day long news kept coming of big layoffs. Caterpillar is doing away with 20,000 jobs, Sprint Nextel is losing 8,000, and Pfizer Pharmaceutical is buying up Wyeth Pharmaceutical (funded partially by banks that received bailout money), and the new organization will cut over 8,000 jobs. (The bailout is helping to fund an 8,000 job loss!) Home Depot is cutting 7,000 people from their payroll, and General Motors announced that they are trimming 2,000 more employees. One estimate that I saw late in the day said that 68,000 layoffs had been announced today alone, and the total for January, which is not over yet, is in excess of 200,000!

But get this - the nation's three basic market measures - the Dow, the S&P, and the NASDAQ - all went up today, albeit modestly. Apparently cutting jobs is a good thing to stock traders - just as long as it isn't their jobs that are being cut - or those of their spouses, children, or parents! It's all relative.

What does the loss of 200,000 jobs matter in the overall scheme of things? It means that mortgage payments won't get paid, new cars won't be purchased, schooling will be put off, vacations will be scaled back or not taken, and medical treatment will be postponed or completely ignored. It means the economy will keep shrinking, fewer goods will be purchased, fewer services required, and more layoffs will be implemented. It also means that crime will necessarily increase.

The government has already kicked in a huge wad of cash to try and end the vicious downward economic spiral, but at last reading the banks and financial institutions that received our tax money were focused on not telling us how it was being spent. So far it appears that most of the money is being hoarded and not pumped back into the economy as originally intended.

That may, however, be changing. Some of the bailout loot was apparently loaned to Pfizer today so that they could eat up Wyeth - and cut a butt load of jobs! It was also announced today that Citigroup, which received $43 billion in government money, will soon take possession of a new $50 million corporate jet - a very sleek affair that seats twelve people comfortably!

Perhaps the time has come to nationalize the bastards!

It's Still the Economy, Stupid!

by Pa Rock

As I have written previously in this forum, I have expended quite a bit of effort in making sure that I have enough of a retirement plan to keep myself from being a burden on my children. To achieve that goal I have made it through life without ever owning a new home, and only once buying a new car (a 1976 Chevrolet Chevette with a sticker price of $2,900). The jobs I have held have never been on the high end of the economic spectrum, but they have always been satisfying to me and of service and benefit to others – and they have always had some form of retirement option.

I am currently drawing one retirement check while working full-time. By the time that I am sixty-six (which gets closer every day) I will be eligible to receive four retirement checks each and every month. In addition to that, I have a 401-K that I have contributed to off and on for years.

Let me tell you about that 401-K:

First of all, it has quite a few options, but they are all based in the stock market. A year ago this month my plan hit a high-water mark of $30,000 (not much, but I do have four back-up retirement checks). Today that fund is down to just over $23,000 and still heading south. This past Monday when the Dow dropped over 500 points, I lost twenty cents less than $666 in value in my 401-K. (Was that a message from God, or what? I’ve got to quit injecting my views on religion into this blog!) Yesterday, the stock market went up a little, but I must have the wrong stocks in my 401-K because it continued to fall. Today was another big loser on Wall Street.

At some point my 401-K may extinguish itself. I hope not. I trust that my government will, sooner or later, begin making wise economic decisions that aren’t based solely on the protection of privilege, and the stock market will recover. But if that doesn’t happen and my 401-K ends up with a zero balance – I still have my four retirement checks – one of which will be Social Security.

Most people in the United States will eventually qualify for a Social Security check of some amount. It was originally meant to give the elderly a way to live on their own without being a burden to their family or being carted off to one of the numerous poor farms that were prevalent before and during the Great Depression. Today, however, the checks are generally too small to guarantee independence to the elderly. They require another source of income, such as a retirement check. And most companies have either raided their retirement funds before declaring bankruptcy, or they have gone with the far cheaper option of contributing a low level of matching funds to a 401-K.

And what happened to the value of those 401-K’s? (See above!)

What does Dear Leader want to do to improve the Social Security system? Why, allow individuals to invest “their” money in the stock market? And what does John McBush want to do to improve Social Security? He supports privatizing it – putting that money under the control of our trained business class? Or perhaps Halliburton!

Our 401-K’s are going down the toilet now because of the greed and corruption of America’s world-class business leaders. Do we really want to give them access to our Social Security funds also?

If you two goobers (Bush and McBush) want to help the elderly to have an independent and secure life, force businesses to redistribute their wealth. Corporate America needs a whole lot less money for the CEO’s and Board Members, and decent wages and benefits (including health and retirement plans) for the people at the bottom of the food chain who are actually doing the work that produces America’s wealth! If the government has money to throw away, such as on subsidies to Bear Stearnes, Fannie Mae, Freddie Mac, and AIG, why not redirect it into subsidies for good companies who are willing to treat their employees like human beings?

And keep your grubby hands off of Social Security!