This Is Going To Hurt A Little...

Okay, time to take a serious look at our finances now that the health care reform law now exists. There's a Washington Post article that takes a realistic look at what must now follow - major fiscal reform.

Tea Party People have been shrieking about the fiscal mess that this health care reform will add to and it appears they're right. I gather the president agrees with some of what they have to say, too - it's just simple, irrefutable math.

Conservatives have been howling that government spending cuts must come first. But Obama was convinced that without health care reform cutting down that fast-increasing budget item, all the other cuts would be negated. It had to come first.

Now he's got his reform. It unfortunately cannot stop there - the next battle will have to be government spending cuts. And government needs to raise more money.

The long-term picture for this country's economy is terrifying and it cannot be blamed on the president alone. Republicans and Democrats alike have thrown money around, hiding spending, cooking books to keep the public from knowing just how far in the hole we're going.

Remember, please, that the last president waged a war without including the billions spent in the budget. And he did it while cutting revenue with tax breaks for business and the wealthy. It just doesn't add up and we're starting to stagger as we try to keep it all balanced.

The answer isn't tax cuts, unfortunately. Not just the wealthy will have to cough up more. We all will. Can we afford it? Hell, no. But we'll have to do it just the same unless we're going to continue to pile up an unsustainable debt that we'll just stick to our kids and their kids, if the country can continue to operate that long.

You don't have kids? You're not worried about the next generation? Get on board anyway. The country's accounts might just not last until you're dead, and unless you've enjoyed the past couple of years' recession you'll be wanting to get that debt down.

The president, according to this article, plans to propose some of what promise to be highly unpopular changes after the November election. And he's playing poker again, gambling that as investors begin to shy away from US Treasury bills (and he seems to feel it won't be long), he'll be able to begin the slicing and stitching that will cut our spending down while increasing government's revenues by arguing he simply has no choice.

He already has no choice. But because this is a country of people who love to hate (evidenced by some of the most hateful and childish photos of the president I would never want to imagine when I searched for "obama health care reform"), we will only pull together if we're convinced we have a common enemy.

We do. It's the deficit. Whether you agree health care reform was necessary before fixing it or not, I think we can agree the deficit is a damned scary thing.

I freak out if I can't pay my bills at the end of the month. I cut spending, I find extra work. I don't charge it, with interest, to pay somewhere down the road.

There is no credit card, no country, big enough to cover this government's debts and operating expenses within the next ten years. We need to go on a spending diet and we need to do it willingly.

This is a country that collected scrap metal and grew Victory Gardens when it was convinced it faced a common enemy. We're facing another one - and we need our most creative thinkers, efficiency experts and diplomats working hand in hand with realistic fiscal experts to win this one.

Happy Holidays.

I've got my holiday decoration on my virtual door, the purple lights are strung on the wall and it feels like Christmas, pretty much. I got Christmas cards out this year (not nearly so many as prior years, but more than the years I sent none at all), I've written my holiday thank you's to the people who've contributed to my radio show over the past year. My shopping is done, my kids are on their way and my guy was up all night trying to finish his ambitious gift plans.

If you asked me most days, I'd say it's been a pretty rough year. For everybody.

But as I wrote those thank you notes, as I sit in my home office and prepare to start another day at a job that, for the most part, I enjoy and that seems secure, I realize it's been a decent year.

We're still here. We're okay. I got a book agent, I'm writing a book (though when it feels like I'm pulling out my insides and giving them a careful examination, it doesn't seem like such a fun project), I've got a new circle of friends and a man whose company I enjoy more than anyone else's. My kids are well and seem to have found their directions. This blog is read by people all over the world; people I may never meet but who know what I think and, perhaps, sometimes, agree.

There's been illness, there are money worries, there are my usual litanies of angst and neuroses. If I look at the world picture, I worry. But if I look at just my little corner of it, I have to admit it's alright. All in all, life's okay. And that gives me hope and energy to try to make it okay for everybody.

I hope you can say that and more and I wish you even better for the coming year.

Pitchfork Mobs: The New Meme

The more I read, the more convinced I'm absolutely on target with my revelation that we have no middle and lower classes anymore - we have serfs and we have Corporate America. And it's not a thought unique to me - the angry people who are fed up with slaving for our corporate/government masters are known as Pitchfork Mobs. Man, there's a mental picture.

There does seem to be increasing news of violence. There have been questionable stories of Goldman Sachs executives buying pistols to protect themselves (stories that Bloomberg began and seem a little shaky on fact-checking). There are stories of attacks on individuals seen as involved in all this, which you can check out on the fine blog, Naked Capitalism.
It's worth reading not only the post, but the comments.

I'm sorry to hear that frustration and anger may be leading to violence. That's not the way I'd like to see the massive change we need occur. Dr. Martin Luther King proved that a peaceful show of mass dissent can make a difference. Ghandi did it as well. Mass marches are needed. A grassroots movement of angry people willing to call, to email, to visit their legislators over and over and over are required. People willing to speak out, to protest, to run for office - that's what we need.

Violence is an outburst, an expression of rage and frustration - and it poisons the people who do it.

That is not the kind of change we need.

Tune Up Your Fiddles - The Fire's Begun

There is a fiscal crisis. Yeah yeah yeah. You're sick to death of hearing about it.

But really. There is.

Today's news was that the brand new MTA payroll tax New York's governor imposed on the Hudson Valley service area has come up 200 million dollars short. And the state's cutting its aid to the MTA by 143 million dollars as well.

What happened? No one's sure yet. Maybe people just haven't paid up yet. Maybe they can't. But the MTA is now scrambling to create its legally mandated balanced budget with a huge, nasty surprise hole in its revenue.

That's just the beginning, according to the governor's budget office. There are hard choices ahead, a spokesman says.

There's a three billion dollar deficit this year. Next year it's seven billion. And the next year, when the stimulus money is gone, it's thirteen billion dollars. Thirteen billion dollars.

This is in a state that's already so heavily taxed that businesses are leaving - not arriving. It's a state where personal and property taxes are among the highest in the country and while the cost of living goes up, salaries stay flat and jobs disintegrate.

You'd expect to see some very serious talk of reform at the state level. Or maybe not. If you live here, you know better.

We're transfixed by the former Senate majority leader's corruption trial (he was found guilty on two of seven counts). We're watching our former governor rebuild his image as a political pundit after being busted for paying for sex. We're arguing over whether the governor should run again or step aside.

Meanwhile, New York is burning.

There are a lot of important issues and it's hard to prioritize - there are civil rights questions, environmental issues, things that will haunt us for generations.

But not if we don't change the way we do business and make sure the state actually stays solvent.

New York mandates school programs but doesn't fund them. Instead, our taxes go up. New York mandates social programs in the counties but doesn't fund them. Our taxes go up.

There is no efficiency, there is little oversight, there's no big picture thinking.

There are highly paid positions filled by cronies and relatives. There are career politicians who are more interested in the content of their pockets and the influence they can wield than the welfare of their constituents.

There is partisan gridlock, with no better illustration than the immature, irresponsible shutdown of the Senate this past summer.

We've got crooks in the legislature - not just quiet ones but ones facing charges. Others have been convicted.

Aid to social service agencies is being cut while the need for their services is at an all time high.

We're in trouble. But there's still no sense of urgency either among the voters or in Albany.

And what's really sad is I think it's not an uncommon story.

Hear that? The fiddle's playing.

Listen to Your Grandparents

Thanksgiving's a great time to get together with relatives. Somehow it's not nearly so emotionally loaded as that Christmas/Hanukkah/Epiphany/Kwanzaa/New Year season. Families just sit down to a meal. No gifts, no nostalgia for Thanksgivings past, no tears, no pressure. And if you're lucky, everybody talks. It can be really interesting.

This year was a good year. The talk turned to politics, then the economy. And we had the good fortune to have three people at the table who've passed their eightieth birthdays and appear likely to be around for another decade. They had some very interesting observations about the world we live in.

"We have never owed anyone anything," one couple told us. "We bought a house when we could pay cash. Now we own several and rent them out. We don't carry balances on our credit cards. We drive a ten year old car. We don't eat out much."

Don't pity them. They don't live a deprived life. They have two vacation homes (they rent them out in the prime season so they pay for themselves), they travel, they collect art. But they respect the money they've made in their professions and spend it only on things that really matter to them.

"We don't spend what we don't have."

They say that's where they see today's society going wrong.

"What is Black Friday all about? What are they buying?" they asked in genuine bemusement.

Good question. Electronics, apparently. The latest gotta-have-it goody that will be obsolete in three months and broken in six months to a year.

I'm torn. I like my modern conveniences. I like my computer (except when a virus tries to sneak on board, as it did this morning. That just infuriates me. Why can't PC's be reliably virus-free?), I like my washer and dryer, I like central heat. But I find myself longing for an off grid lifestyle that's simpler, that lets me unplug - no, that FORCES me to unplug. I'm a lazy slug. I'll watch TV when I could read. I'll read when I could write. And my back tells me my days of hauling wood and shoveling snow are over - doubt I'd last long if I had to heat with wood now.

But I don't want a cell phone - I have a cheapo pay as you go because my job requires it. I don't use it for much else. I have one television. I'd like to throw it out the window but I still watch it. I don't need a PalmPre, an iPhone, a hURL, a wEDGIE, a sLice or any other cutesie name they may come up with for yet another piece of technology that plugs me into the grid.

For Christmas, I want some good company and good conversation. I want to be with people who like to laugh. I don't want to go to the mall and I don't anyone going there for me. I'd rather we all saved our money for what really matters to each of us.

For me, the best gift would be a little more peace - not only in the world, but in my own little corner of it. We all deserve it.

If You Thought This Year Was Bad In NY - Wait for 2011.

The 2010 budgets aren't official yet in most counties across New York, but it is not too soon to talk about 2011. In fact, the county leaders I'm talking to say it's essential that we start talking about it now.

Counties in New York have mostly managed to avoid large tax increases by cutting staff, cutting corners where they can, raiding fund balances (those rainy day accounts they all try to maintain) and raising taxes as little as possible.

All the padding will be gone in 2011. The federal stimulus dollars will be gone. Fund balances will be smaller. Costs probably won't go down and revenues are unlikely to increase. In fact, people and businesses are leaving New York, not arriving. That means even if expenses stayed exactly the same, a smaller pool of taxpayers will be paying them.

Officials in several counties say Albany has to wake up and wake up now. 2011 will be, according to the New York Public Interest Research Group, "disastrous".

Despite lip service to cost cutting and consolidation, state government spending hasn't been really cut and has, in fact, increased. The state continues to pass on its costs to local and county governments - those are the same people who pay the state taxes, too...so any savings on the state level are just smoke and mirrors.

The heartening thing is that if taxpayers start talking now, they have the opportunity to make huge changes. Every state office is up for grabs in 2010. Remind your representatives of that fact and you're likely to get their attention; particularly if you organize a series of phone calls, emails or letters.

New York government has been a mess for years and New Yorkers put up with it. If New Yorkers are so spunky, so outspoken, why aren't they screaming yet? Better yet, why aren't they supporting viable alternatives to the 'business as usual' Democrats and Republicans?

Run for office and bring your pencil - there are a lot of budget items to be reconsidered.

Bohemian Bankruptcy

Thanks to Yves and Naked Capitalism for this one.

Recession, UK Style.

On the Road to a Depression

There have been articles lately warning that without meaningful bank reform, a Depression is coming...and it will be within the next three or four years.

Sound alarmist? I was still a bit on the fence but twenty minutes with Bill Moyers and his guests convinced me.

Watch progressive Representative from Ohio, Marcy Kaptur and Simon Johnson, former Chief Economist at the International Monetary Fund. He's one of the founders of the website Baselinescenario.com.


Bill Moyers Interview

Ring Around the Foreclosure, We All Fall Down

If you've been checking in occasionally, you know that I've been in the middle of the loan modification process for a year. The simple version is that, bottom line, I should not have been given a mortgage...I just didn't have the income. But the banks were anxious to lend and I was confident that we had a plan that would make it work. Then the recession hit.

I haven't missed a payment. I haven't even been late. I was raised to pay my bills in full, on time, and not be part of the chain of delinquencies that cause trouble for everyone down the line. But I'm peddling hard and slipping backwards.

The local foreclosure prevention office encouraged anyone who was having trouble, who foresaw trouble down the road, to start talking to their banks before they hit a crisis point. I did.

We sent all the papers to IndyMac, only to be told that they needed more; they didn't have a program for people who weren't delinquent; they were being sold to One West; they needed us to apply all over again, they needed more. The president announced the HAMP program. I got turned down because they were transitioning to the new program. Please apply again. We did.

The latest word is that they're sorry, they're not yet participating in HAMP after all. They have no program for customers who haven't missed a payment. They'll let me know if they do decide to get on board.

This is, remember, the former IndyMac FEDERAL bank. They got rescued as they sank under the weight of their own greed and were snapped up by OneWest, which has adopted aggressive tactics to make sure customers are paying, including repeated calls demanding payment before the grace period is up.

So I've hit the wall. There is no light at the end of the long tunnel and I'm not even emotional about it. Many people have lost as much or more than I stand to lose.

But I am angry that despite compassionate words from the White House and our elected representatives, what's really happening is business as usual. Banks are seeing the recession as a terrific business opportunity and the Obama administration has backed off on demands for regulation, for common sense, for control of not only salaries, but size. There is no serious talk of reinstating the Glass-Stiegel Act. There is a stirring call from the president for business to regulate itself. That hasn't worked yet and there's no reason to believe it will in the future.

Money, big money, wins.

I have spent a morning with people who are living in low-income housing, trying to find work, lining up at the food pantries for the week's groceries. I'm lucky and I know it.

But the greed of this society, the unbridled lust for more, is destroying our foundation. The middle class is being taxed into extinction yet the burden for caring for the destitute, paying for services and trying to help the poorest among us get jobs, get an education and get on the road to self sufficiency falls on those of us who aren't much better off than they are. Taxes, insurance, the cost of living - they're skyrocketing while salaries are flat and jobs are disappearing.

We're in trouble but the people making the decisions are the ones who are benefiting from this situation.

I'm one of millions. And let me say it loud and clear: This System Is Wrong. Shame on us. It exists because we allow it to exist.

Signs of Recovery

I am no expert. I am just a writer who covers the news and gets to hear a lot of different points of view. And I'm hearing a common theme: Believe it or not, things are getting better.

If you've lost your job, if you're losing your home, if you're awake nights worrying about the future, understand that I'm not minimizing your situation. I'm just as scared as you are. But the fact remains, there's evidence that the economy is starting to breathe on its own.

Let me tell you what I've heard.

1. From the editor of a business publication that covers New York's Hudson Valley -
"Businesses are starting to make some very cautious plans for long term growth. Small businesses are still starving for credit but it seems like nobody's hiding under a blanket waiting for the storm to pass. They're coming out."

2. From a writer in Pennsylvania who's working on a book on the rush to drill for natural gas - "The gas companies disappeared for a few months there. They were rescinding leases, not taking out any news ones. I think the money for those leases were coming from the stock market and there just wasn't any. But in the last six to eight weeks, they're back. They're buying up leases again. It was such a relief when they were gone, but I guess it's a good economic sign that they're able to afford to get back to snapping up drilling rights."

3. From the New York State Association of Realtors - Sales of single homes in New York were up 14% in March compared to February - and prices seems to be creeping back up. Ulster County in the mid-Hudson Valley, had an eye-popping, jaw-dropping increase in homes sales of almost 67% from February to March.

4. Solar manufacturers are opening up facilities - three of them in the Hudson Valley in the past couple of months. There's a new wind energy project underway as well.

5. From a friend who works at a major radio network - "We're told the layoffs are over. They've cut as much as they're going to and now they're going to be trying some new ideas to market what we do across the country."

6. That business journal? It's starting up a new paper to replace a group of community papers that shut down when the Journal Register went bankrupt.

7. Banks are lending. They're darned careful and you'd better have all your ducks in order and have the money to back it up, but they're lending. That may seem unfair, but those stricter standards were the only ones that ever really made sense. It's a reality check.

8. Sonic is opening a new restaurant near me. Yeah, yeah, big deal you say. But this is in a town that recently saw its Friendlys Ice Cream shut down. It's lost Boston Market, Linens 'n Things stands vacant, Ann Taylor packed up and went home and Lazy Boy got off his recliner and hit the road. But Sonic's moving in. Not only that, but there are about half a dozen new gas stations all owned by one obviously very optimistic guy.

This is just one small corner of the globe, but we're not an isolated pocket. If things are getting better here, it's getting better in other places as well.

And what's really encouraging is that this damned uncomfortable time has resulted in some noticeable changes. A local town is organizing a massive cleanup day where over a hundred people have volunteered to go out and pick up the trash. And they're planning to do it again in the fall. A local realtor reports she's got customers who are moving to the country, deciding that if they have to change careers, they want to find work that contributes something to society.

We're not out of the woods, but maybe the trees are thinning. Hang on.

And if you've got any other signposts that indicate we're on the road out, share them here. We all need to hear.

***UPDATE***
A report on http://moneymorning.com speculates that a sharper than expected drop in the GDP can be considered good news as well, though you've got to squint to see it, in my opinion. An economic advisor in Pennsylvania says it's good/bad news - that it means companies are running as lean as they possibly can and any increase in demand at all is going to have a major positive effect. Okay. I'm willing to consider the idea.

But I've also been told some consider all this a bull trap. I wasn't familiar with the term - I thought it was a typo for something else. But a bull trap, I'm told, is a slight improvement which suckers any leftover cash into the market, only to have it rush down the drain with a sudden whoosh. Kinda like the dead cat bounce.

It's all speculation, people. Anyone who says they know for sure is blowing smoke because the one thing you cannot predict is confidence - and that's what this is all based on.

But it is interesting to see the signs and I admit to wondering what would happen if everyone started pointing out the bright spots in the darkness. Might we all pull out of this sooner?

The Best Image of Corporate America Ever

I can take no credit for this. The first I saw of it was here...a hipster blogger/cartoonist beloved of my hipster daughter.



http://www.oddtodd.com/message875.html

But it's genius because it's so clear. Corporate America isn't structured like a pyramid, nor is it an oval..it's a big, fat, top-heavy broccoli. But when it tries to make cuts, all the cuts are coming off the bottom.

What Desperation Feels Like

This blog was called to my attention today. I do not swear to its authenticity - these days you can't be sure who's blogging from desperation and who sees a terrific marketing opportunity. What I will say it's an entertaining read, in the genre of "Oh my god how IS she laughing right now?"



http://www.girlonthebrink.com/