Idol Chatter

Let’s face it, the small business owner is under a lot of pressure with the weak economy.  Even in the best of times they have a harder time getting credit and now, that has nearly completely evaporated.  Small business owners struggle to get by.

Now with over 1,100 pages, it seems like nearly no one (and that includes your congressmen and senators) has actually read the bill.  But with President Obama addressing Congress last week there were no specific provisions mentioned there designed to really help the small business owner.  For example, while Obama seems to have little regard for tax cuts, actually implementing tax cuts for small businesses would enable many to hang on during these difficult times.  And by hanging on, more jobs are retained in the economy.

In a recent poll conducted by Merchant Circle over 10,000 respondents when asked about whether they approve of the stimulus bill overwhelmingly voted NO.  Not a surprise really to those of us in the trenches with them.  Too bad we are, once again, ingnored by our elected officials.

With the incentive plan now passed, President Obama now turns his views towards the housing market.  Certainly if the economy is to recover, the housing market, which started the quick downslide, must be addressed.  The problem is that there seems now to be significant factions within the country that just hate the idea of bailing out people who failed to pay on their mortages.

This isn’t an easy situation but it does seem that if one of the major issues was the ARM rates underlying much of this junk lending suddenly rose significantly causing people who would have paid their mortgage to now be unable to, the solution should address the rates, not try to bail out folks who chose to stop paying.

Moreover, it’s unclear how you help a family who has been foreclosed on.  Once foreclosure happens the family has to get out and it makes no sense to try to put them back into the home that has now been cleared of any possessions left behind.

In any event, there was a lot of chatter on talk radio today about the plan, much of it revealing a grow sentiment against the bail out ideas.  We’ll stay tuned to see what happens next.

As we hurl towards what is admittedly an historic ignaural ceremony next week one has to step back and ponder what is most important to us as a country.  Now before you think I’m going to wax philosophically on how Obama is our first black president take stock of what is actually getting more air time on the major networks.  Is it what President Obama will say or is it what Michelle will wear?

I wish I were more surprised to hear the incessant drone about what color, what style and how much the 1st Lady will spend on her gown.  But I’m not.  It is testiment to our shallowness as a nation.  Or maybe it’s our national attention deficit disorder that has us barely deal with more meaty subjects (unless we can spin them as some sort of impending disaster).  In any event, we’ll hear more about Michelle’s dress, how many balls the President and 1st Lady attend and what they ate than we’ll spend analyzing any substance that may be contained in the President’s speech.

Oh well…

I hear the smart money is on a cream or other natural colored dress but I’m betting on red.  Now will it be a plunging neckline or bare back…

Earlier this week I listened to President elect Obama address congress to move swiftly to put together and a approve a new economic recovery package.  Now that was to be expected but as I’m listening to the President elect I’m wonder who is this guy?

The ‘new’ Obama seems to have lost his optimistic outlook entirely.  This new guy likes to talk about how we are at the edge of an economic abyss from which there may be no recovery.  No recovery that is, unless congress approves his package.

The thing is that a package of incentives cannot do anything for the next 3 months and very little for the first half of the new year.  More people will get laid off which will be painful.  The housing market will not come back to life  anytime soon.  The big three auto dealers will be back in Washington DC shortly asking for a lot more money to survive.

However, what Obama won’t acknowledge is that there will be recovery without his package.  And whether the economic recession we are in gets any worse or last any longer without it is debatable.  What I do know (and I think the President elect does too) is that his job creation plans that have to do with infrastructure projects (yes folks we are talking about laying concrete for roads and bridges) won’t do anything for a single mother of 4 who gets laid off of her adminstrative job.  I won’t do anything for the 48 year old father of 2 in college who can no longer make any money being a real estate agent.  It just can’t help the hundreds of thousands of folks who are not physically capable of doing that labor.

So the bad news is that much of what gets included in this stimulus/recovery bill just won’t help us out and will just raise the deficit further.  We are in for a grim year this year.

But we will recover because we are a huge economic force.  Once the contraction stops – and it will – spending will slowly come back.  And that will lead to job growth.  We need to focus on just how vast this country is and how rich it is with not only natural resources but with a people who will raise to the occasion.  Americans do not need a hand out.  This country has survived worse and come back the stronger for it.

Mortgage rates fell again this week prompting the usual segments on the news shows that the prudent investor should refinance now for savings.  And while this is, on the surface, sound advice, what it overlooks is whether there is still enough equity in the home to make a refinance approval likely.

In some regions of the country, home values have dropped by more than 20%.  This drop may cause some folks to go upside down in their mortgage owing as much or more than the home is worth.  Even with a small positive equity, many home owners could get turned down for refinancing unless they can afford to pay a sizable payment to increase their equity position in the home.

So an opportunity for a few folks but nothing that will help the rank and file who are, in some cases, hanging by a thread financially and braceing for more layoffs in the post holiday economy.

In reading all the back and forth commentary on whether Caroline Kennedy should be seriously considered for the senate seat that Hillary will vacate if appointed as Head of State, it seems that Senator Clinton is silent on the matter.  Now it’s not unusual for a senator vacating their seat to weigh in on potential replacements so one has to wonder what Hillary really thinks.

While Senator Clinton had to be disappointed at Caroline’s backing of Obama, can that be part of the silence?  Or, perhaps it is just that Hillary isn’t going to back a woman without any iota of relevant experience despite the famous last name. Hillary is too savvy to get caught up in a silly game of political tit-for-tat.

In the end it’d the governor’s decision to make.  Governor Paterson seems to be unimpressed with Caroline when caught with the retort, “How is she a front-runner?”

After being briefed that the nation’s unemployment rate could increase to 9% today, it’s reported that President Elect Obama is now looking to create or save up to 3 million jobs.  This is a half million more jobs than he had set as a goal last month and now 3 times what he pledged during his election run.

The number coincidently covers the expected number of future job losses now being forcast as the economy continues to wallow in what is now the worst recession in decades.  While admirable to want to keep the nation employed, one has to wonder if these notions are a bit to simplistic.  For one, it ignores the fact that the skills of the people now losing jobs may not come close to what is needed in the government manufactured ones.  Moreover, the concept of bring major government projects aimed at increasing employment to actually getting folks employed quickly is unrealistic.

The unpleasent truth is more likely that we are going to struggle for another year or two before the economy begins to right itself.

President Elect Barack Obama is now finding that life ‘at the top’ is tough and not always manageable with his considerable charisma and intellect.  Last week the outrageous story of Illinois governor Rod R. Blagojevich was accused of trying to sell the Illinois Senate seat that Obama vacated with his presidential win.  It didn’t take long before the media started to question what, if any, contact and/or participation Obama himself or his staff may have had with Blagojevich in the process.

Now it would seem that there would be some conversation by someone on Obama’s staff that could be entirely innocent but as Obama and his organization are learning the hard way, the stench often sticks to everyone.

What’s more interesting than this potential scandal for Blagojevich and anyone he may have included in his schemes (even the innocents) is that how Obama and his staff were so unprepared for handling the scandal.  Now for any other president elect, this would have been unheard of.   But in this writer’s opinion, Obama was largely untouched by anything unpleasent during the campaign.  Aside from the brief rucus over his choice of church with it’s contraversial pastor, Obama was left alone.  Kind of weird.

Case in point is the purchase of his family home and the entwined sale of part of the property to a questionable ally from a political perspective.  While I won’t bother to recap all the details of the transaction here, suffice it to say that it had far more damage power than Senator McCain having to admit to ownership in 7 homes.  McCain got slaughtered and Obama got nothing.

It was only a matter of time after Obama won the election that something would come up.  This has nothing to do with Obama and his integrity but the reality of running a huge staff in which it’s impossible to know, much less direct every action of every person.  And it has to do with the large number of news outlets and this country’s love of ‘dishing up the dirt’ on people.

Ironically Obama who ran on the premise of the best of America is now going to have to learn how to deal with the worst.  As I stated at the top, LIfe at the top does have its unpleasent side.

In a recent news article I read today on Reuters.com, the focus was on how we may go into a depression from the current recession.  Now the premise of this argument was that the recent and significant fall of oil prices is a bad thing.

Are you kidding me?

A much needed easing of one of the principle expenditures in any individual’s budget is now a bad thing.  Forget how the sky high prices were making us all cut back our driving and cut back on other discretionary expenditures, that supposedly is not as bad as getting this price break on gas.

The arguement is that “the swift fall in oil prices is now lowering the absolute level of consumer prices and bringing with it likely declines in nominal GDP over the next three quarters.”

Well isn’t that only a potential rollback of the steep incline we just saw during the first 3 quarters of this year?  Moreover I say ‘potential’ because many companies absorbed the price increases for a period of time before they started to raise their prices.  To say that they now will decrease prices is a bit of a stretch.

Of course if you bought the first arguement you could then buy the second which is that “Falling prices would cut demand and discourage employers from hiring.”  But really if prices came down significantly that would incent consumers to, well, consume again.  And there is a core demand in the economy that won’t be easily shut down.

With government bail outs for the financial industry and probable for the auto industry, two hard hit sectors are getting some relief.  And with Obama’s likely proposals to spend on infrastructure and maybe a tax cut, the economy won’t pull out of the recession anytime soon but sure won’t sink into a depression.

OK this is not one of those subjects I tend to spend much time on but in watching the evening news I saw this short spot on how there isn’t the money there used to be in recycling.  Kind of a bummer really when you think about it.  Many of us need a bit of encouragement to ‘do the right thing’  – especialy businesses.  If we can incent them to dispose of trash in an environmentally friendly manner, all the better.

If businesses go from making money by recycling to having to pay for pick up, one has to wonder if they’ll start to opt for just sending it to the landfill.  That would be unfortunate.  Regardless of what you believe about the cause of the worsening of our fagile balance here on Earth, we should all do the right thing to keep our planet not just good for our lifetime but good for the multitude of generations to come.