by 4 people |
How bad is it?
I began to ask myself, how bad is it really?
I've been living in the US since the early 60's.
That's a 40 plus years of living history.
Here is my perspective.
April, 2008
Latest update...
The air flights were packed. Restaurants were full and in some cases had to wait on line to be seated. Traffic is busy especially around LA. People were driving and few were car pooling. Hotels seems to be doing a brisk business. As I drove down from San Jose to LA, 380 miles, I see farm after farm and fruits growing on the trees. On the beaches, I see people enjoying the summer weather... At a museum, I see tourists every where. Where is the recession???
- The highest misery index was in 1980 - the last year of President Carter's administration.
Misery Index
The hard facts...
- Unemployment rate:
The current unemployment rate of 5.1% is still very low by historical standards. - The DOW index over the last 5 years:
The Dow has risen to a high of 14,000 and now is averaging in the 12,000 range. It is still up 50% over 5 years ago. - CPI index:
(1913-1930)
(1974-1992)
(2000-2008)
The current CPI (a measure of inflation) is rising but it has been relatively low in the last 5 years. Compare to the early 1980's when it was 12%, this is a piece of cake. - Quarterly Average House prices (2000-2007):
The current housing bubble is just that - a bubble. Housing prices have risen over the last 20 years and especially in the last few years. It rose way above what people can afford. Partly due to speculation and greed. - GDP rate: (2000-2007)
Our GDP has continuelly rise over the last 7 years. This is no small feat post the 9/11 tragedy. We have lost so much more than the Twin Towers... - US Dollar vs. Gold prices:
The falling value of the Dollar especially compared to the high price of gold should sound an alarm bell. A weak dollar is directly result of deficit spending and Congress does not seem to care. - Home ownership rate:
One sure sign of a rising standard of living the the rate of home ownership. The number speaks for itself. Inspite of recent sub-prime mortgage scandal, we still have a very healthy home ownership rate. - Gasoline prices adjusted for inflation:
As high as gasoline prices is today, it is not the highest after adjusting for inflation. The early 1980's - when we have double digit inflation rate is the highest gas prices.
Empirical data...
Recently, I have traveled to Scottsdale, AZ, Richmond Va., Chicago, IL, Los Angeles, CA, Atlantic City, NJ, Washington DC suburb, and I'm located in Westchester County NY. Every where I go, I see construction projects, restaurants full of patrons, cars congested highways, planes full of passengers...
Well, you get the idea. From my perspective, the economy is doing quite well despite the negatives.
Here are some others...
- people are getting Flat screen TVs
- GPS is the latest gadgets of must haves
- Cell phones are everywhere
- Restaurants are packed
- Planes are full
- immigrants (legal and illegal) are rushing to come here
- Computers are every where
- Wi-Fi is available
- Hotels are full
What have we experienced in the past...
- Double digit inflation in the early 80's.
- Gasoline line in the mid 70's.
- Stock market down turn - DotCom era.
- Clinton scandals - late 90's.
- Enron scandal in 2000.
My personal data...
- 401K balance - My retirement fund has increased in value by almost 80% over the last 5 years.
- House value: (over last 10 years)
- Net worth - My net worth has increased in value by 75% over the last 5 years.
- Taxes - My taxes are through the roof (property taxes and school taxes).
- Employment - My current salary has gone down by over 50% from 2002. I am now with a non-profit company but I am much more happier doing what I do...
What is not right?
Here are somethings that are definitely wrong with our current situation.
- Deficits spending - Our Congress continues to spend more than they take in...
- Trade deficit - We are loosing in the global market place. We don't make much of anything. Everything seems to be made in China... Our trade imbalance is hurting our standards of living.
- Oil dependence - We are buying and using too much imported oil especially from the Middle East.
- un-regulated Hedge funds - The financial industry is running wild with all kinds of speculations and profit from ill gotten gains.
- Falling dollar value - Our deficit spending is hurting the value of the dollar compared to the Euro or to gold.
- Air travel - Our air transportation needs a major overhaul. From pricing to routing to safety and security, they all needs attention.
- Illegal immigrants - We have a two tier working force driven by the large amount of illegals entering our country. It is hurting our over all infra-structure from medical costs to criminal justice to our school system.
- high property taxes - The local taxes are going up faster than inflation. Why?
- Social security - Our aging population (baby boomers) near retirement is causing our Social Security system a major turmoil. If something is not done in the next few years, they will go broke.
- Inflation - Our current rising inflation rate if un-checked will rob all of us our savings and our retirement. It is also hurting people on fixed income.
Conclusion
Change can have two effects, positive or negative. Let's hope we choose to change for the better.
New Featured Lenses
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American Supremacy
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In my recent discussions with some friends, I realized that my whole premise is wrong in assuming that they understood history and the significance of the American experience. In some people's mind, our country is on equal footing with other nations...
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New Poll Module
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BigJim wrote...
Nice lens, Jack. There's always many ways to look at the economic situation. Too bad more people don't consider it more closely instead of just believing what the media shoves down our throats. Most of these problems could be helped or solved by passing the Fair Tax.
Posted April 14, 2008
JaguarJulie wrote...
Wow! What a truly amazing lens this is. You've got plenty of hard facts to help us make our decision. I say economic times are defined as a REPRESSION. AB !!
Posted April 14, 2008
beeobrien wrote...
Jack, you are gonna have SOME opinions coming in on this one! Rising costs of health care, consumables, gasoline, college tuition.....I'm definitely struggling more than a few years ago.
Posted April 14, 2008
jackclee wrote...
Adez7, I agree with you the government's numbers are incomplete. How about empirically speaking? We can all have our own opinions about what is going on around us. I'm curious to know if others see what I see. Thanks for checking in.
-Jack
Posted April 13, 2008
adez7 wrote...
Hi Jack, The one thing that I see that that everyone seems to be overlooking is that the government is lying about the figures. Ever since they quit making GDP figures known to the public, there is no real way to measure the accurate amount of goods and services against the M1, M2, and M3 money supply. Without that data there is no real way to measure inflation other than to take the Gov's figures, which I do not. Great lens though. *****
Posted April 13, 2008
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