Posts Tagged ‘Recession’


Bank of China Credit Card: America’s Love/Hate Relationship with Borrowing and Spending


Why is it such a huge, vital, cut-all-spending-now situation with regard to our nation’s economic woes?

I get it: being in debt is bad. You end up paying a fortune for something because of all the interest that you then owe to your lender. (Trust me: I have credit cards, I know how it works.)

And there’s a lot of talk about how we’re “running up the credit card” with regard to the Iraq and Afghanistan Wars, the bailouts, and TARP. But it’s not really on a credit card. Right? We don’t have creditors actually knocking down the doors of the Capitol Building.

I’m being snarky here on purpose because people (myself included) talk about the debt as if we know to whom this debt is owed — China, right?  My point is that the way our government spends money it doesn’t have is different from how you or I spend money we don’t have. And the repercussions are different.  I don’t imagine that Hu Jintao is on the phone every month calling up President Obama saying, “Yo, Barry, you didn’t make the minimum payment last month of $233,588,838.35.  Do you know when you’ll be able to pay that?”

Also – we’re in a society that is based on borrowing. The reason our economy is still sluggish is because there isn’t much lending going on to small businesses (some banks being very tight with their lending practices and people not wanting to borrow money to expand/start their businesses at this point in time), therefore not many new hires.  (Well, it’s a reason.)

But, it’s rather bipolar to want the economy to get going through increased spending and borrowing while at the same time blaming spending and borrowing as the reason why we’re in this whole mess to begin with.  So spending and borrowing is both good and bad — but right now, all we hear about how bad it is to spend, how bad it is to keep borrowing.  No wonder the economy is still moving at a snail’s pace!

I have no answers.  I’m merely positing issues that I’m seeing and issues that I’m dealing with in my head.  I would love some clarity on the economics of this because that’s one subject on which I’m not very knowledgeable.


Our Current American Political Climate: Why is Government a Four-Letter Word?


Why do people imagine government workers are lazy, overpaid, and unproductive drains on society?  And what positions are people imagining to personify all government workers?

Based on my own notions, I figure most people are thinking about one of two people: postal service employees, and overstaffed, nondescript office personnel in DC.

But, how many Americans employed by the government fit into these roles?

Let’s crunch some numbers:

Number of postal workers587,768 (2009)

Number of federal financial administration* employees: 107,221 (2009)

Number of full-time federal employees: 2,518,101 (2009)

(I picked “financial administration” because that seemed generic enough for the sake of this humble blog, which doesn’t claim to be an expert on these matters, simply a rough estimate for the sake of argument.)

Whipping out my abacus, it looks like those who represent the average “government worker” in the mind’s eye of many Americans account for less than 28 percent of those employed by the government.

Not remotely close to being the majority, it’s hard to argue that these people should be the face of the amorphous being that is the government worker, an arguably pointless term anyway.  If you work for a private company, are you a private worker?  Are you a free market employee?  Does that even come remotely close to defining your job, your title, your business?  Of course not.  So, why should we lump all government workers under the gigantic umbrella that is called “government.”

The truth is that government workers are health care professionals, road workers, police officers, park rangers, librarians, lawyers, judges, correctional facility officers, FBI agents, scientists, teachers, and soldiers. Just to name a few.

Are teachers overpaid?  Are our troops?  Are our doctors lazy and unproductive?  How about our lawyers or librarians?

Absolutely there are individuals who are lazy, unproductive, and overpaid, just as there are in any industry, in any office, in any company.  But, to generalize all of the vastly different positions that fall within the realm of the government as such is simply unfocused anger and resentment without any depth of thought given to the argument.

And why so much animosity toward people who work for the government?  Especially during these times of economic woe, if the government is hiring and it means that people will be working rather than collecting unemployment during the recession, how is that bad?  And before you get all Ayn Rand on me, I get that it’s better for a free market to have more able bodies employed by the private sector, but it’s not as if simply working for the government means that you’re part of the government anymore than an average Wal-Mart employee should be blamed for the inequalities and questionable practices by Sam Walton’s progeny or the workers at Barnes and Noble should catch hell for the company not adjusting their business model to succeed in the 21st century.

When government has become a four-letter word in our current political times, it’s important to stop a minute and really think about what government means and how complex of an institution it is before making snap judgments about the people who call the state their boss.  It is valuable to be critical of governmental spending, but better to do so on a case-by-case basis rather than these broad generalizations that miss the reality of the situation.

America was founded on limited government, not no government at all.  And those who work for the state are Americans, too, trying to make ends meet, and possibly even performing tasks and duties that help you and our country as a whole.

Photo courtesy of ekonon’s Flickr Photostream.


Laid Off Police Officers: Economic Downturn Causing Increase in Violent Crime?


Five laid off police officers in Bay City, Michigan retaliated by renting billboard space with images that suggest that the lack of cops on the streets could lead to more violent crimes, all in an effort to get back their jobs.

The cops haven’t won much support for their inflammatory billboards, nor have they gotten their jobs back, even being labeled “domestic terrorists” by some.

The police say they paid for the two billboards that went up last week to bring attention to the impasse in negotiations between its union and city officials, who are seeking a 10.8 percent reduction in labor costs from eight unions to tackle a $1.66 million budget deficit for the fiscal year that began July 1. The billboards also spotlight the city’s decision to replace the roof on city hall for $1.6 million.

The police would have you believe that the city put its citizens’ safety at risk in order to put a new roof on city hall.  But just how much less safe are Bay Citians with less than 60 cops on the beat to serve and protect a population of roughly 35,000?

This article doesn’t say just how many officers under 60 the city currently has, so it’s tough to run these numbers perfectly so let’s find a range. If there were 60 cops employed, that would average out to 1.7 officers per 1,000 residents.  If there were 55 cops employed, that would be about 1.57 officers per 1,000 residents.  So, rough estimate: 1.6 cops per 1,000 residents.

After a little investigation — because how are we to know the value of that number without any other information? — I found the average number of police officers for Midwestern cities with populations between 25,000 and 49,000 people (in 2008) was 1.7. Given that we’re dealing with averages and estimates here, that’s pretty much right at the average for the region.

Seattle, a city 17 times the size of Bay City, has also recently had people taking to visible venues — this time the op-ed page of The Seattle Times to voice their concerns about laid off police officers, which has brought up the question: how many cops is enough?

UCLA professor of public policy Mark Kleiman … says there’s no generally accepted benchmark for police staffing levels. But he says a decent police-to-population ratio is 1.5 to 2 officers per 1,000 residents.

Looks like Bay City falls safely into that acceptable range.

Given the state of Bay City’s economy — part of Michigan, which has suffered one of the nation’s highest unemployment rates for the duration of this recession — it should come as no surprise that the city has had to make some tough budgetary decisions.

And while I feel for the laid off police officers for having to join the ranks of the unemployed, it seems foolish to have squandered what money they may have had saved up on an inflammatory billboard that will most likely do nothing to change the reality that, until the economy rebounds, there just literally isn’t enough money left to employ them.

Photo courtesy of Christopher P. Bills’ Flickr Photostream

(H/T Brad Grabowski for the link)


Wall Street Flip-Flops Allegiance Back to Republicans

Wall Street

In what was really no surprise at all, it was announced on Wednesday that the financial companies on Wall Street shifted their federal contributions from the Democrats early in 2009 to the Republicans by the year’s end.


Well, it’s pretty simple.  See, they usually favor the Republicans because they’re the ones who push for deregulation, which lets them do all that fun stuff they did for the last decade like fabricating their own impossible derivatives to line their pockets – which had a huge hand in causing our current deep recession that has forced tens of millions of Americans out of work.  When the bottom dropped out at the end of 2008 – the markets crashed, the mortgage industry collapsed, and the banks nearly went bankrupt – Obama was elected president and the financial industry flip-flopped. They started donating all kinds of contributions to the Democrats to help convince them to bail them out, which they did. 

But now that things are back to good for them – the rest of the country is still devastated and can’t get loans while average Wall Street workers get half-a-million dollar bonuses and look no worse for the wear – they’re once again throwing their support behind the Grand Old Party, hoping that they can get back to their old ways.

And the wheel goes round and round. 

This is why I fail to understand why people who are so quick to distrust government so easily lend their confidence and trust in corporations.  Both institutions are run by power-hungry people who are easily corrupted, as is usually the case with humans and power (see: any history book).  A balance where one checks the other seems to give us regular citizens – you know, the vast majority of the population – the best shot at not getting completely screwed by either entity.

I just don’t think our current political climate couldn’t handle that notion.

Image via Wikipedia
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