Here on Main Street The Recession Has Arrived
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Wake Up Folks. The Recession Isn’t Coming. It’s Here.
When I got up yesterday morning and turned on my TV, the Dow was down 500 points and CNBC pundits were telling me the sky was falling. I listened to their reports and sipped my coffee while imagining myself reduced to eating cat food and living in a cardboard box somewhere—my comfortable retirement ruined. Blah blah blah—gloom and doom and now a word from our sponsors. Cut to a commercial about “erectile disfunction”. I turned off the TV and started my day.
When I turned on the TV at 6 pm, the picture had evidently changed. The Fed, it seems, had ridden to the rescue with a fat rate cut, the biggest in 23 years. The experts on the evening financial wrap up were breathing a sigh of relief and discussing “buying opportunities.” The market had rallied. The Dow’s loss was only 138. They felt this was good news. Oops. See me feeling a frisson of fear. Some investment banker who was being interviewed observed that there was a 50/50 chance that the USA would slide into recession. 50/50? What world is he living in?
I’m not on Wall Street. I’m sitting down here on Main Street, and from down here it looks like recession and inflation, the evil twins, have already come to town. There are three houses for sale on my block and not one of them is moving. My food bill is up. Ditto utilities, gas and home heating oil. My real estate taxes are up too, and needless to say, my investment income is down. I’m thinking twice before I pull out my credit card and I’m not making any travel plans. My retired neighbor who usually goes to Florida in the winter isn’t going this year. Another friend with a kid in college just got downsized from his corporate job at the age of 53 and can’t seem to find comparable work. He and his family are scaling back big-time.
Now I grant you these are luxury problems—ripples in the pond compared to what is happening to people further down the food chain. But here on Main Street, there is definitely trouble. Unemplyment is up and locally,at least, the job layoffs have started. I'd say there's definitely more to come. So fasten your seat belts and don't spill your coffee. It's going to be a bumpy ride.
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Comments
{{{{idunn}}}} I'm so glad you looked for me and found my new hub. I wasnt sure about putting it up. I'm still new at this ya-know and it didn't seem long enough or good enough--or just enuf in any way.....so I'm glad you like it.
So I stole your retirement plan eh? Never mind. Captal crime is bad karma--come on over to my place instead and have some Little Friskies:-)
now that's an offer I can't refuse. :)
it's a great Hub.
Great hub robie2! All I can say is, amen to that. Remember when just a few years ago a gallon of milk was about $2.00 give or take? I pay $4.00 for a half gallon with bovine growth hormone and antibiotics added. Regular milk (with poisons added as usual) is 2 buck for HALF a gallon. Almost everyone I know has been saying the economy is in a big mess for at least the past year, and now, all of a sudden, Wall Street comes out of its coma. I'm glad you did post this. It's great! (PS--my 401K is currently losing around 6%).
thanks "p" -- been offline since yesterday and just found your comment. Thanks for the encouragement. I think I'm turning into a "hubaholic" as for the market--well, we will all go together when we go eh?
My father was always saying "I can remember buying
such and such at soing so!
I would think to myself, get with it Dad, things are pretty good.
Now there is just once or twice I say to myself I remember when?????
We live in today's World not yesterdays.
Let's live for to morrow not yesterday.
Be honest are you any worse off than your parents?
Come on tomorrow, I want to be there.
Great Hub
thank you
Right you are Mr.M--yesterday is soooo, well, yesterday LOL. I would be the last person in the world to reminisce about the "good old days". and I certainly do not feel worse off than my parents for which I am very grateful. That said,I do notice the disconnect between Wall Street and Main Street and I do think that there is a perfect financial storm brewing which will affect us all--worldwide-- and who knows--that might not be a bad thing in the long run. We live in exciting times:-)
even with the bargain hunting the dow is still dropping today, waffling. they are trying to convince themselves the sky isn't falling and some of them don't believe it.
"Wall Street wavers amid bargain hunting"
Have you got the curtains up in the cardboard box yet? :-)
muise ('indeed') in irish (north version) and I'm trying to figure out how to install a cabinet for our endless supply of little friskies~
conas a tu? (how are you)
ha, finally a chance to practice my deficient irish again, if only to increase interest in it in general. :D
dow -76.57Â (12170.43)
it's really dropping again. unsure how the day will turn out, maybe the bargain hunters will pick up towards end of day.
don't bet on it! Too bad the only thing I know how to say in Irish is " Erin go bragh" maybe I could reply in Icelandic:-) Goðen daginn (hello)--pronounced sort of like "go then, die in"
I want your icelandic, even though envy is one of the 7 deadlies. :mad:
the pronounciations are going to similar I notice... cool!
here is a good one for your future use: diúl an firic sin (suck on that fact - imperative form) :p
as in, the market is now down 100 points - diúl an firic sin :D
Very good hub. I believe you are correct. Here's what Paul Krugman had to say in this morning's paper.
Op-Ed Columnist A Long Story
It’s still not a certainty that we’re headed into recession, but the odds are growing greater.
By PAUL KRUGMAN Published: February 8, 2008 The economic news has been fairly dire this week. The credit crunch is getting worse, and a widely watched indicator of trends in the service sector — which is most of the economy — has fallen off a cliff. It’s still not a certainty that we’re headed into recession, but the odds are growing greater.
And if past experience is any guide, the troubles will persist for a long time — say, into the middle of 2010.
The problems now facing the U.S. economy look a lot like the problems that caused the last two recessions — but this time in combination.
On one side, the bursting of the housing bubble is playing the role that the bursting of the dot-com bubble played in 2001. On the other, the subprime crisis is creating a credit crunch reminiscent of the crunch after the savings-and-loan crisis of the late 1980s, which led to recession in 1990.
Now, you may have heard that those recessions were short. And it’s true that the last two recessions both officially ended after only eight months.
But the official end dates for those recessions are deeply misleading, at least as far as most peoples’ experience is concerned. There’s a reason that the Bush administration, in its (increasingly strained) efforts to tout economic performance on its watch, always talks about jobs added since August 2003. It was only then — two and a half years after the recession began — that the U.S. economy began to experience anything that felt like a recovery.
And the same thing happened a decade earlier: the recession that began in 1990 officially ended in March 1991, but the jobless recovery that followed kept Americans feeling miserable about the economy right up through the 1992 election.
Since the current problems of the U.S. economy look like a combination of 1990 and 2001, the shape of this episode of economic distress will probably be similar to that of the earlier episodes: even if the official recession is short, the bad times will linger well into the next administration.
How severe will the distress be? The double-bubble nature of the underlying problem — a housing bubble and a credit bubble combined — suggests that it may well be worse than either 1990 or 2001.
And some highly respected economists are issuing dire warnings. There has been a lot of buzz about a new paper by Carmen Reinhart and Kenneth Rogoff that compares the United States in recent years to other advanced countries that have experienced financial crises. They find that the U.S. profile resembles that of the “big five crises,” a list that includes, for example, Sweden’s 1991 crisis, which caused the unemployment rate to soar from 2 percent to 9 percent over a two-year period.
Maybe we’ll be lucky, and that won’t happen. But what can be done to limit the damage?
Since September, the Federal Reserve has slashed its target interest rate five times, and everyone expects it to cut further. But interest rates were cut dramatically during the last two slumps, too — yet the slumps went on for years anyway.
Meanwhile, Congress and the Bush administration have reached agreement on a much-hyped stimulus package. But the package, while probably better than nothing, is unlikely to make a noticeable dent in the problem — in part because the insistence of the administration and Senate Republicans on blocking precisely the measures, such as expanded unemployment insurance and food stamps, that are most likely to be effective.
Still, by January the White House will have a new occupant. If the slump is still going on, which is likely, this will offer a chance to consider other, more effective measures.
In particular, now would be a good time to think about the possibility of going beyond tax cuts and rebate checks, and stimulating the economy with some much-needed public investment — say, in repairing the country’s crumbling infrastructure.
The usual rap against public spending as a form of economic stimulus is that it takes too long to get going — that by the time the money starts flowing, the recession is already over. But if this turns out to be a prolonged slump, which seems likely, that won’t be a problem.
But we won’t get any innovative action to help the economy unless the next president has a couple of key attributes.
First, he or she has to be free of the ideological blinders that make the current administration and its allies fiercely oppose the idea that the government can do anything positive aside from cutting taxes.
Second, he or she has to be knowledgeable about and interested in economic policy. Presidents don’t have to be their own chief economists, but they do need to know enough to take the right advice.
Will we have that kind of president? Stay tuned.
bravo, ralph~
"Still, by January the White House will have a new occupant. If the slump is still going on, which is likely, this will offer a chance to consider other, more effective measures.
In particular, now would be a good time to think about the possibility of going beyond tax cuts and rebate checks, and stimulating the economy with some much-needed public investment — say, in repairing the country’s crumbling infrastructure..."
exactly.
I'm more into gluttony and sloth myself but nevermind:-)
I'll join you in sloth and if you're serving shellfish I'll join you in gluttony too. I have a weakness *blush*
shrimp cocktail it is then--we'll go down in style-- and Ralph is invited to join us.
Thanks for your input, Ralph that article is right on for my money(hey wait where did my money go?) I think our only hope is a democrat in the white house who can do what FDR did during the depression. I like the way both Hillary and Obama are talking about "green collar " job creation and priming the pump rather than trickle down econ....thanks soooooo much for the comment.
You've been writing longer than you choose to admit. You may be new at hubbing, but your writing style is down pat. Hear Hear for Robie2 I'm a fan!
HI Laurie and thanks for reading and commenting--I'm retired now, but back in the days when fax machines were considered cutting edge, worked in journalism and PR for awhile. Also did some web content back in the late '90's when the web was young and I was younger:-) So you are right, I'm not new to writing --But I am still new to hubbing and the mysteries of SEO etc. In fact I'm on quite a learning curve here and enjoying it a lot--kinda like doing a crossword puzzle or something. Thanks for the kind words--we are mutual fans <bows low>
Hey Robie, every morning I turn on the TV and I tune in to the news channel. Then I wonder why I turn on the TV and tune in to the news channel!
I know this doesn't make you feel any better but its the same here in the UK - except for the fact that our politicians are trying to blame the American economy for the slump.
House priced have gone through the roof here, food and utilities are sky high and, lets face it, they won't drop back down again. The politicians steal from the pensions, then tax retired people on what's left over. They then wonder why low income people like myself aren't 'investing' in pensions for the future.
Can I ask you to do something Robie - when you find the perfect spot for your cardboard box, put my name on one in a close vicinity - that way at least we can have have good conversations when were starving!
ahhhh welcome jooles to the cardboard box community:-) Good conversation is worth more than anything IMHO. Not surprised to hear that things are not great in the UK either--we are all so interconnected and indeed, American greed is what has started the international house of cards on its downward spiral--but what does it matter--we will all go together when we go so come on over--we'll dine on Little Friskies and have great conversations LOL Thanks for reading and commenting.
Just found this - and you wrote it 10 months ago. Things have got worst since then! And will probably slide downhill some more. We have a website (not trying to get a link to it) and include a page of Special Offers that might be of interest to our viewers. Compiling this used to be a bit of a challenge but now it seems like everything is reduced/on offer/ two for the price of one. Or worse, a closing down sale. But, what are you going to do - laugh or cry? And if the answer is cry, what good will that do - you only live once.
Hi 2patricias and thanks for finding this and commenting. Yes, we all knew this was coming, but that doesn't make it any easier. Time for us all to be good to one another. I've visited your website and really like it so please, do post a link to it here if you happen to stop by again. I'd be pleased:-)
IĂ°unn says:
2 years ago
wonderful hub.  I looked for you specifically you know.Â
this ----"I listened to their reports and sipped my coffee while imagining myself reduced to eating cat food and living in a cardboard box somewhere"
hey! that's MY retirement plan dammit. I have a back up though, commit a capital offence for the single bed room and board and an easy death in my old age.Â
it's not a bad plan. I see a day when 50% of americans can support the other 50% of americans not through tiny evil transfers of food, or by providing decent jobs, but through the justice/penal system as prisoners for profit - what's left of the middle class providing retirement for the elderly poor for the profit of the disgustingly wealthy.