The economy from the average people’s viewpoint . . .
When a person loses their job it effects their entire world. At least everything in their personal world. The bills pile up. You lose years of house payments as your house goes into foreclosure. Paying the heat and light bill becomes a problem. Cable is cancelled. Food is a priority. The nightmare does not end there. Your relationships with your family change. If there is ever a time to depend on your religious beliefs it is probably now.
You can expect to spend at least 90 days looking for a new position if you are an average person with average skills. A lot of people have been out of work for over 2 or 3 years. Bankruptcy is a real possibility if someone can afford the lawyer.
I think we need to change some ground rules for the average person out there. Unemployment insurance is one of those ground rules. It has to cover enough to feed your family and to cover your basic bills. One of the bad things of inflation is it very seldom does cover enough to tide you over into a new job. It needs to get training and skills that are in demand in the hands of the unemployed so that they become marketable commodities again.
I think our real estate market has to change also. Right now if you lose your house the big loser is going to be the bank. The bank has to get two-thirds of the money you owe on your mortgage. Often times the house is simply not worth what you paid for it in today’s unemployment rich market. This in turn has caused tax revenues to plunge downwards. These revenues support most of local government and schools. The really big losers are going to be your local governments and services such as police, firemen, libraries, and schools.
When the rules were set up, no one anticipated a depression ever occurring again. Supposedly we had ground rules that were supposed to keep that from happening. One by one those ground rules have been taken away in the last 20 years.
Unions, good and bad, had one advantage. They kept wages current with the inflation caused by governments. So if you are inflation is at 4 percent per year, then your wages have to increase by 6 percent to stay even on the net side of things. Most companies have kept raises at 2.5 percent or less in the last 10 to 20 years. It is a numbers game. As your numbers increase on wages so do the prices on everything. So do the taxes on wages increase as the numbers do. One man payed wages in gold, and claimed the lower taxes. That one really upset the IRS! They might still be in court over that one.
The idea was to gradually take away all the gains people made from increasing wages through collective bargaining over the years. We actually have Right to Work laws that some people want to make into national Right to Work laws. The idea is to take away collective bargaining and slow wage increases. That might work except if wages do not keep up with prices, then your retail market goes into a depression. It is action and reaction type problems.
Another problem is the dismantling of tax breaks for home ownership. When I first owned a house, the tax break was enormous in real money. I got back around 1,000 dollars a year from the tax breaks. Then some idiots in Congress decided to dismantle those breaks gradually. In 1970 dollars, 1,000 dollars is actually close to 10,000. See a book on finance and appraisal in real estate if you do not believe this statement. It tells how to adjust appraisal on properties to the common marketplace. Now it is not even worth going a long form on IRS documents in most cases. Only if you have higher interest rates is it even on the radar.
Then there is the deregulation of the banking industry. How did that work out for you Mr. Bush? Because some of the biggest financial institutions in the world are on the verge of going under. Why? Because we took away basic common sense rules. Some of the banks gambled away billions of dollars on residuals. The incoming President was stuck with the problem. There is no sane answer to deregulating the financial industry. They need rules to keep everyone safe.
What is needed? On a basic level we need jobs for people to support their families with. But that is only part of the problem . . . We need to dismantle complicated rules in favor of rules that everyone can understand and live with. We need to get rid of cumbersome restrictions of government.
I could not belief some of the rules set up here in the state of Ohio. They actually set up a rule that you have to have your headlights on when you use your windshield wipers. What happened to common sense? Another is contracts with security camera companies to issue tickets for people running red lights. On the surface that seems logical . . . except they cheat. The rules put a yellow light that goes blink, blink, red. They set the lights to make people run red lights! The old computer adage is Keep It Simple Stupid! I think it needs to be applied to all our laws. Get rid of the thieves in government.
For instance, when we were a county district the two main roads through out town were 45 mile an hour speed limits. According to the state, we have to make them 35 miles an hour when we became a city. These are four lane highways. I seldom see anyone on those highways actually obeying the speed limits. Only when a police car is monitoring the roads do you see people adjusting their speeds.
One road I know about is partially in and out of the cities. It goes from 35 miles to 45 miles to 35 miles to 25 miles an hour back to 35 in a 3 mile area. This is all within state rulings on speed limits. It is heaven for a speed cop.
The idea is to take away complicated rules that provide thievery in our government on the average person. These were just some examples of local theft. Another is using zoning boards to steal from people. The trap right now is lawn signs and using excessive labor costs to fine people for not mowing their lawns in a timely manor. I got news. When you have 4 inches of rain in a week, it is impossible for a working person to get the lawn mowed.
Well, that is all for this first post. I know I rambled a lot. Take care . . .