Friday, November 4, 2011

My View

Random ruminations from your resident curmudgeon...

We all know that our economy is struggling with high unemployment. There are a lot of reasons for this, but one that is often overlooked is the effect of housing, specifically the lack of new housing starts that impacts our economy. Take a look at the following chart:

Notice that as the blue line (housing starts) starts to decline in 2008, the red line (unemployment) starts to rise significantly. Housing as an industry makes up a large component of our work force. As housing starts have fallen over the past three years, there has been a corresponding increase in unemployment. To be sure, the high level of unemployment cannot be attributed solely to the decline in the housing market, but the impact of a declining housing market has been a major contributor. The problem that the Fed faces is that low interest rates have not stimulated new demand and the housing market still has some significant problems that have to be rectified. Corporations get blamed for a lot of the problems in this country and for not hiring. Some of that criticism is justified. Know this, however: until the housing market begins to improve, it will be difficult for the unemployment rate to come down to more normalized levels.

I was offered a job at a company that makes compasses. I turned it down. I didn't think they were headed in the right direction.

Since the economy rolled over into a recession in 2008, most people have seen their net worth decline significantly. Savings were depleted to pay bills and retirement accounts generally took a hit in the market declines. It has been a difficult time for everyone. Well, not everyone. From 2008 through the end of 2010, according to Congressional disclosures released by Roll Call Magazine, the average net worth of our legislators in Washington increase by 25% to a cumulative $2 billion. Frankly, this is understated because Congressional disclosures do not include homes and non income generating assets. This is spread evenly between the parties, meaning that both Democrats and Republicans have financially benefited from their "service" Now I am all for any individual legitimately making and keeping all that they can, and I am not implying that these gains enjoyed by our legislators were illegitimately gained. But the idea of government "service" seems to have gone by the wayside and tenure in Washington is seen as a means to gain riches. This furthers the perception that our Congressional leaders are out of touch with most Americans and are only looking out for their own interests.

When I am down, I like to whistle. It makes my neighbor's dog run to the end of his chain and choke himself.

One of the central tenets of the Occupy Wall Street movement is that income inequality in our country is an evil problem. We have all heard their mantra that the "rich are getting richer" and the implication is that this is getting worse and is unfair. Forget the fairness argument, but what is really happening with income inequality? Here are the facts. According to Census Bureau data, the wealthiest 5% of Americans saw their incomes fall 7% when George Bush was in office. Betcha don't hear that anywhere in the discussion, do you? The gap between the wealthiest and the poorest actually narrowed under President Bush. Under President Obama, the wealthiest 5% of Americans have seen their incomes rise by 5.7%. I know you will not hear that in the mainstream media. So incomes have been rising for the wealthiest Americans with a Democrat in the White House.I have no problems with that, again as long as their increase has been achieved legitimately. Here is the point: we should not be concerned with how much a person is making. Instead, we should be focused on making it as easy as possible for someone in a lower income bracket to move to a higher income bracket through their efforts. Rather than focus on class warfare, our leaders and our nation should be focused on creating an environment where the success and corresponding income of an individual is determined only by their efforts, not some artifice of the federal government.

Sex is like air. It's not important until you're not getting any.

And that, my friends, is my view.

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