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"The little reed, bending to the force of the wind, soon stood upright again when the storm had passed over." —Aesop
If the news from the mainstream media about the economic climate is to be believed, it seems that there are faint but encouraging signs that the worst of the recessionary storm is over. Economic indicators are trending up a notch. Real estate bargains are being snatched up and the inventory of houses for sale, previously about a year’s worth is now down to just about 6 month’s worth with real estate investors and those who waited for this kind of market are having a ball with foreclosures and bargain basement-priced properties. All good news, right?
I would treat all that with a grain of salt and some caution. We’re not out of the woods yet. The problem is not so much the credibility of media or the tremendous pressure it collectively bears in further depressing an already dreary state of affairs if it churned out news of doom and gloom but in the fairy tale, magic wand, Polyanna approach to a serious situation that affects millions of ordinary people.
While the puffed up numbers may allow us to give a temporary sigh of relief, the reality of it down on the ground where it matters to ordinary people affected on the gut level, is far different. I do a lot of anecdotal personal research, asking cashiers when I check out about how business is. I talk to the butcher, the waiter, the gardener, neighbors, friends, associates and strangers. I read up on the trends. Most everyone I meet tell a far from rosy story. Everyone is feeling the pinch or reeling from the blows. Unpaid furloughs mean there’s a lot less to go around. At 10% unemployment rate, this indicator is a serious cause for concern. If this indicator hits 15% to 18% unemployment rate within the next 24 months, then we would have reached the threshhold of the Great Depression. This also means that, with few exceptions such as the healthcare field, employment-based immigration based on merit will be on hold for as long as there is a glut of unemployed skilled local workers who are either citizens or permanent residents. The picture is totally different from what media would have us believe. Perhaps there is a time delay of 3 to 6 months for the trickle down effect of positive indicators.
Media is between a rock and a hard place with the option and the power to skew the truth or to lay it out straight, whether it’s a bitter pill to swallow or not. In the end, as a business that is hurting just as badly as any, media will do what it has to do to improve its bottom line, pumping up the volume for inane entertainment that sells, and further doping us with the "circus" we desperately seem to hanker for when times are dire. Sigh.
About a year ago, I wrote a cautionary piece about getting ready for a perfect storm. I still think that we are not out of the woods yet and that the process of mending, bracing and pumping new life to a severely broken down structure will take more time than we are prepared to give. And so, here it is with a few tweaks and a bit of updating.
Batten down the hatches, a perfect storm’s still bearing down on us. Those of us who have lived long enough in the US know all too well that going through a recessionary storm is nothing new. We’ve been there before and more than likely, we will cycle out of it again. The question is, how soon. Still, with or without the reassuring advantage of experience and hindsight, the period we are all facing brings with it certain dangers that have had no precedent, and it would be foolhardy to predict easy solutions and an effortless way out of the morbid mess we’re in.
During the recessionary storm of the early nineteen nineties, we didn’t have two foreign wars, launched on false pretext, that drained us in human capital and national psyche, not to mention the billions of dollars being spent. We didn’t have the serious magnitude of the real estate crisis in foreclosures that we have with millions of Americans rendered practically homeless and languishing in financial limbo, duped by the unrelenting greed of the mortgage industry. Nor did we have the serious energy crisis that is driving the whole world to distraction coupled with the threat of global warming and a planetary balance that’s out of kilter, e.g hurricanes, floods, earthquakes, tornadoes, heat waves. No place on earth is exempt. Which brings us to wonder: Is God mad at us and the world? What we have right now is a recipe for a perfect storm, the disastrous results of which could be of a magnitude and severity, we can only guess at. The most that economists can tell us is that this storm, is going to be a long and deep one.
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