Wednesday, December 24, 2008

Recession Refusal

Sorry, but we’re not seeing signs of a full-blown recession around here.  That, coupled with reports of “less growth” as opposed to negative growth (as stated on a couple of weeks ago, I can’t track down the reference anymore – that’ll teach me to document better!) makes it all the harder for me to buy in to the gloom-and-doom that the news readers are peddling.  My wife and I are in the midst of launching a new online business and we have a small retail presence to serve our local customers.  The retail outlet is in Blue Moon Gift Shops which is a fantastic venue for specialty merchants.  Since setting up shop at Blue Moon in late July we have seen sales grow rapidly and have struggled to keep up with demand over the holidays (how’s that for a reason to struggle during a “recession.”)But what of the credit crisis?  What about all the construction workers out of work?  What about the problems we’re seeing in the auto industry? I’m glad you asked!  The credit crisis was mismanagement on the part of the lenders – trying to give anyone and everyone the American Dream on the instant gratification plan.  As I have stated previously, the acceleration of information and associated acceleration of expectations has not been an unequivocal success for society.  Now we have seen the day-trader induced volatility from the equity markets spread to the lending market, only this time the volatility is due to the institutional side rather than the individual.  If the mortgage lenders had maintained the standards of their predecessors and avoided the “no money, no credit, no problem” car salesman mentality I’m certain of two things.  First, we would not have seen the wild escalation in real estate prices of the previous decade.  Second, we would not have seen the horrific crash and associated foreclosure tsunami that we’re witnessing now.  Like the man said, “There ain’t no such thing as a free lunch” and we just got the tab for an opulent meal.  Now we have lumber mills running short shifts, skilled carpenters looking for anything to generate income and painters going door-to-door soliciting work.  Not to mention the people making absurd offers on real estate that isn’t distressed just because they assume in a weak market every property ought to sell for a steep discount.
 The auto industry is in trouble due to mismanagement that goes back 30-40 years or more.  They have long suffered from the philosophy that bigger is better and Detroit is king.  Innovation has amounted to nothing more than adding a curve here and an air dam there, maybe some tweaks under the hood, but there haven’t been any significant innovations in generations.  Sure, Ford has swapped engines in their SuperDuty trucks, but the last two changes (from the International 7.3 to the 6.0L and the 6.0L to the current Twin Turbo) have been disastrous.  The other two have fought similar battles while failing to bring an economical, efficient, robust unit to the market in a time where people are starting to look for more environmentally friendly options.  It’s not the unions, it’s not the suppliers, it’s the management – plain and simple.
Now we have the economists performing their autopsy, publishing such insightful pieces as this;
How is that for an example of Monday-morning quarterbacking?   I suppose it would be too much to ask for them to consider that gas prices were the highest in history during the time he’s examining – which consumed any “extra funds” that most people would have had to spend on other goods and services.  Now he’s looking at last quarter and saying “oh, wait ’till you see how bad next quarter is” – this is tantamount to screaming “FIRE” in a crowded theater.  An economist is a meteorologist who gets to tell you what the weather was last week, which is all but useless.  Another way to look at it is this, they are masters of information after the fact.  I’m so sick of the talking heads I could literally explode. They have moved beyond “reporting” the news to conjuring doom and gloom. It’s the proverbial wreck that is too horrible to imagine but too compelling not to look at.
So, I invite you to join the movement and make the choice to boycott the “recession” – go about your business and don’t let the news readers influence you.  Pay off some debt but don’t stray too far from your path of normalcy.  If those of us who can manage this approach actually pull it off we will only help those who are truly in a bind by creating jobs for them through our activity.

Friday, October 24, 2008

Deficit Reduction for Idiots

There is a simple way that average Americans can help reduce the Federal budget by approximately $150,000,000 per year – and it won’t cost anyone a dime.
 All you have to do is get rid of all your dollar bills.  No, I don’t mean give all your dollar bills to Uncle Sam – just take them to the bank and exchange them for dollar coins.  Then spend those coins just as you would have spent the notes that you exchanged for them.  When someone gives you a dollar note don’t spend it – take it to the bank and exchange it for a dollar coin.
You see, a dollar note has an average lifespan of only 1.5 years while a dollar coin has a lifespan of about 30 years.  It’s easy enough to understand how durability contributes to efficiency, but that’s not the only benefit of using the coin vs. the note.  When notes need to be examined to establish their condition they must be counted and handled on an individual basis while coins can be weighed in large quantities.
Then there’s the convenience factor.  Yes, there will be a transitional adjustment, but imagine being able to feed a vending machine coins instead of notes – we can get rid of all those finicky bill accepting (rejecting is probably more apropos) gadgets.  Paying tolls becomes simpler (toss in the coins and go!)  The UK eliminated the one pound note long ago and they now have both one and two pound coins.  There isn’t a one euro note – it’s a coin!  Perhaps the U.S.A. needs to follow the rest of the civilized world and phase out the dollar note.

Where, oh Where?

OK, I’ve been negligent for a while.  I can’t claim an apocalyptic event that is responsible for my lack of writing, just lots and lots of little events that have kept me quite distracted.  Between the Presidential race, economic situation and general human condition I’ve got plenty to vent my spleen over – there has certainly not been an excess of common sense brought forth in recent history.
Stay tuned!

Thursday, April 3, 2008

West Wing Comes to Life!

I think we’re about to see television come to life.
The final season of “The West Wing” is about to be played out in front of our eyes.  Here’s the cast:
John McCain as Arnold Vinick
Hillary Clinton as Bob Russell
Barack Obama as Matthew Santos
Look for lots of chaos in Denver, including nominations from the floor and uncertainty about the bottom of the ticket until the last possible moment.  After the relatively young and upstart Obama sews up the nomination over the mediocre yet self-righteous Democratic middle-manager he will go on to narrowly clip the stalwart GOP nominee by the slimmest of margins to earn a trip up Pennsylvania Avenue.
In the next episode President-Elect Obama will populate his cabinet with a well-rounded selection of advisors with the integrity and experience that will help him become one of the most successful Presidents of the past 100 years.
All we have to do is wait.