Tag Archives: Great Recession

How the Heck Did We Get Here: Blame it on the Baby Boomers??

I am sitting in my office scratching my head about the upcoming election.  How did we get to this place where neither candidate is trusted or believed, and a large number of citizens are considering a third party candidate just to avoid voting for the two primary party candidates.  Our country has become a country of entitlements, political correctness, and media manipulation.  I certainly don’t have all of the answers, but I think my generation contributed to this mess.

I am a baby boomer.  Most of the time, I am proud of being a ‘seasoned senior citizen.’  We baby boomers were born between the years of 1946 and 1964.  That would make the oldest of us 70 years old, and the youngest would be 52 years old.  In some respects, the younger generations would consider us ‘overly seasoned’ or perhaps, ‘fossilized.’

Our generation was the first that had a name.  We were those people born immediately after WWII. Take a bunch of war veterans and mix them with a bunch of women that haven’t had a real date in years, and BOOM, the world experienced an explosion of births.  Our parents were a tough bunch. They all lived through the Great Depression.  Then, as teenagers and 20 somethings, they fought and won WWII.   Tom Brokaw later referred to them as the ‘Greatest Generation.’  They knew of, and sometimes experienced the atrocities of WWII.  Immediately after WWII, we were back in Asia fighting a war in Korea.  It became apparent that not all countries wanted world-wide peace.  At the same time, numerous countries were conducting nuclear bomb tests.  That warm relationship between the US and Russia during WWII was not all that warm.  The possibility of a nuclear war hung over us for most of our childhood years.

This made our parents a rather tough bunch.  We were taught the difference between winning and losing.  We did not receive any ‘participation’ trophies.  We were instructed in ‘bomb drills,’ in the event of a nuclear attack.  Our teachers were always right and were always respected.  Any deviation from good behavior resulted in punishment.  In my case, I got spankings by my mom and five ‘beltings’ by big Daddy G.  I deserved every one of them.  This was not considered child abuse, it was considered parenting.  There was no pretense that our parents were going to be your ‘best friends.’  They were going to be disciplinarians, and they filled that role marvelously.  (My dad was not my friend until I was in my 30s.)  We were taught to be independent and to work hard.  Being blue collar was not a stigma.  It was instilled in us that if we wanted something bad enough, we could obtain it through hard work and diligence.  Anything was possible!

Every school day was started with the Pledge of Allegiance.  We sang our national anthem with fervor. Then, as we got older, we were called upon to represent our country in another war….the Viet Nam conflict.  Many volunteered or were drafted and performed their duty to fight in a war without a genuine purpose.  To this day, the best explanation for fighting this war was the ‘domino theory.’  That theory was the belief that if one country fell to Communism, then others will fall to Communism.  But Lyndon Johnson took this to the extreme by committing over 500K troops to Viet Nam.  He made Saigon (Ho Chi Minh City) the 23rd largest American populated city in the world.  Over 57,000 Americans were killed in this war, with hundreds of thousands more suffering psychologically from what they had experienced and from the way they were treated once they returned home.  Americans believing they had served their country were now being spit upon and called ‘baby killers.’  Many lives were lost, and many more minds were destroyed because of this war.

So there you have it.  A very brief description of what formed and what affected the lives of the baby boomer generation.  What was my purpose for relating this information?  Well, because of the way we were reared, we, as a generation, decided not to be as strict and structured as our parents on our children and our grandchildren.  We became adherents of the ‘live and let live’ theory.  We became more concerned about ourselves and our families to the point of missing the gradual changes to our society.  And now, as I look back at the way our country has evolved since my childhood, I want to publicly apologize to Generation X, Generation Y (Millennials), and Generation Z as to how the Baby Boomers have failed you.

We Boomers need to apologize for the level of entertainment on our televisions and our movies. In our youth, all movies and TV programs were appropriate for all ages.  We did not need a rating system designating P, PG, R or anything else.  I am not a wilting flower, but it is difficult for me to believe the amount of profanity, sexual innuendo, sex, violence and gore that has permeated our entertainment.  Parents of today need to realize that your children are seeing this garbage and they are being affected by it.  How could they not see it?  It is on at prime time on numerous channels. Instead of having three good TV channels like when I was young, we now have hundreds of bad channels.  Look at how few good comedies we have today.  We had many while growing up.  Reality shows and cop shows seem to be the general format of TV today.   Garbage entertainment really began in the late 60s and early 70s.  TV was still somewhat regulated, but the movie industry had taken a definite turn for the worse.

Our Boomer generation invented the computer.  This led to the popularity of PC’s and laptops in every home. Technology is marvelous for all it can do.  But as one pundant has surmised, home computers have become a ‘pipeline for pornography.’  Do you think people are being affected by that?  Coupled up with violent video games, do you think our children are being affected by it?  I am not quite sure how we could have stopped this garbage, but I will apologize anyway.

I apologize that we appointed a Supreme Court that overturned term limits on federally elected officials.  Yes.  Legislation was actually passed during the Clinton administration limiting term limits, only to be overturned by the only organization without them…the Supreme Court.   Now we have career politicians and all the graft, corruption and personal enrichment that are a result of it. Decisions are being made every day by our elected officials for personal gain without regard for what is best for the country.

Our newspapers, magazines and TV news at least attempted to appear impartial during elections held in the past.  This year?  The gloves have come off with such notable organizations like the New York Times and the Washington Post not even attempting to hide their support of Hillary Clinton.  In previous elections, news organizations would show their support for a particular candidate in an editorial.  Not now.  They show their support by smearing their candidate’s opponent.  The latest is the release by the New York Times of Donald Trump’s 1995 tax returns which show a loss of over $900 million being carried into following years to reduce any future tax burden.  The crime here is not Trump’s taxes and carry-over as that is perfectly legal and by IRS statute allowed.  The real crime is the publishing of his taxes by the New York Times.  They claim that they received them in the mail. Yeah. Right.  Any CPA doing such a thing would lose their license to operate.  I believe the IRS themselves did it.  This is the same group that targeted conservative groups prior to the 2010 mid term election.  In particular, the Tea Party movement.  Who would investigate this matter?  Well, the FBI.  That same group that let Hillary off the hook for emails even though the FBI director’s brother provides legal services to the Clinton Foundation.  Sound fishy?

Isn’t it a shame that most of our printed media has reduced itself to the level of the National Enquirer?  In some instances, the National Enquirer is more believable.

Do you trust the government?  During the 60s, when the unemployment rate was reported, it actually meant the number of people who were without jobs that wanted them.  Today’s unemployment rate has been reported at less than 5%.  I assure you, this is for purely political purposes in an attempt to show how wonderful our economy is faring before this election.   In fact, the real unemployment rate is just under 10%.  Why?  Because so many people have quit attempting to find work.  But wait….there’s more.  Do you know how many households in America do not have anyone working?  Over 22%!  Yes.  Over 22% of the households do not have a breadwinner.  How are they surviving?  Working for cash?  Welfare?  How wonderful does our economic picture appear now?

Do you like our current policy of allowing anyone to use any bathroom depending on what sex they feel like on that particular day?

So, as I look back on my life, the goal I have always had is that I leave the world a better place than when I entered it.  My generation of Boomers has failed.  We have made mistakes.  We allowed the country to become so liberal, so politically correct, so dependent on the government and so militarily weak that it is not the same country of our youth.  We have taken free speech to such an extreme that we now have public disrespect for our flag and our national anthem being considered heroic. Yet, only 1% of our citizenry has served in the military to protect our country and our freedoms.  We now have groups of people attacking and killing our police because they think they are ‘entitled’ to do so. We have had deadly Islamic terrorist attacks on our people.  We allow people of unknown origin to enter this country every day without having any idea of their true purpose in coming here.  Many times, it is not to assimilate like previous immigrants.

I want to make a plea.  I know many people who are not enamored by either candidate.  For their personal beliefs, they are going to vote for a third party candidate.  That has been tried before with disastrous results.  Rather than giving George H.W. Bush a second term, Ross Perot siphoned off  enough conservative votes to give Bill Clinton the presidency without having received a plurality.  Do you want to vote for the Libertarian candidate who did not know what an ‘Aleppo’ is, or could not name his favorite foreign leader?  If you like the policies instituted by the present administration, by all means you should vote for Hillary Clinton.  If you truly believe that the country is heading in the wrong direction, then do not waste your vote on a third party candidate, hold your nose and vote for Donald Trump.

I am considerably older than those members of Gen X, Y, and Z and here I am apologizing for the direction our country has taken in the last 60 years.  My fervent hope is that in 30 or 40 years, you will not be writing a blog apologizing for the bad decisions your generation has made and suffering from the consequences of bad decisions.

Government Gridlock – Costing our Country its Future

Anyone with two eyes, two ears, and an IQ higher than a turnip knows that our federal government is having budget difficulties.  It is because of the Great Recession.  It is because of lost revenues due to a high unemployment rate.  It is because of rampant spending on the part of our elected officials.   You would think that with all the press given to the “fiscal cliff” and to the negative effects of reaching that cliff, our federal representatives would be feverishly working to balance our budget to avoid our great nation from falling off that cliff.  So are they?

Here is a simplified synopis of how the budget planning process is supposed to work.

Since the passage of the Congressional Budget Act of 1974, the Senate and the House are supposed to pass budget resolutions in the spring.  These budget resolutions set the framework for taxation, spending and other fiscal considerations for the coming year.  They also lay out general plans for the next four years.  If the budget resolutions differ, the Chambers are to hammer out a compromise.

Budget resolutions are policy plans.  They are not appropriations bills, or spending bills, which actually allocate monies for specific purposes.

If a budget resolution does not pass, the federal government does not go dark.  In the absence of a budget resolution, appropriations bills will continue to allocate money.   (This last sentence is the weakness in our system, which allows a bad situation to get worse!)

This all brings us back to the question: What are our federal representatives doing about balancing our budget?  And when was the last time that a budget was approved?…………tick………………tick…………………tick…………  Time is up!  April 29, 2009.

In 2012, not one single annual appropriations bill has was brought to the Senate floor!  The U.S. House passed seven of the 12 annual appropriations bills that year and sent them to the Senate for consideration, according to the status report by Republicans on the Senate Budget Committee.  The Senate Appropriations Committee also approved 11 of the 12 spending bills and sent them to the full Senate for consideration.

So what happened?  It actually sounds as if some of our federally elected officials were indeed working at attempting to provide a budget.  Read on……………

None of the bills approved by the House or the Senate Appropriations Committee were ever brought to the Senate floor for a vote.  Senate Majority Leader Harry Reid, D-Nev., who decides which bills will be considered, told reporters on July 10, 2012, that no spending bills were likely to be approved in 2012 due to an ongoing dispute with House Republicans over how much the federal government should spend.  No fooling?

True to his word, Reid so far has not brought any of the annual spending bills to the floor since that statement in July, necessitating the short-term budget measure to keep the government running for another six months.  This also means that there are not any four-year plans provided for future budget planning.  There is no shell of a federal budget, much less a framework for future budgets.

Everyone who knew we did not have a budget for almost four years, raise your hands.  Yup, that’s what I thought.  I had no idea either.  I haven’t heard much about this in the media.

I know I have higher aspirations for the people who are elected to oversee the welfare of our country.  And what do they do?  They are playing patty-cake politics at our country’s expense.  It would be fair to assume that this group, regardless of political party, are flying by the seats of their pants (or skirts) and that they really do not have an original thought or plan to get our country out of this financial mess.   One person, a man from Nevada who won his last election by 40,000 votes, has decided that because those mean, vicious Republicans want to cut spending, he will circumvent the debate and compromise process by not introducing budget bills on the Senate floor.  Why, exactly, are these people in Washington?

Don’t get me wrong.  This is not just a Democratic party issue.  There have been other times in our nation’s history when the Republicans did not pass a budget when they were in the majority.  But I must admit, the Democrats have been overachievers in not getting a budget approved since 2009.   We have had three years without a budget, and we have an excellent chance of extending the record.

The irony of all of this, is that our country is still on the brink of the financial cliff.  The fiscal cliff was going to hit on January 1 of this year.  As I mentioned in an earlier post, I expected the gutless wonders we have elected to Congress to postpone making any decisions.  They did just that, and now the new cliff date is March 27, 2013.  I suspect that when that date approaches, they will again delay by passing temporary appropriations bills to keep the country running.  All of this without any permanent solutions for what are becoming huge permanent problems.  Social security, Medicaid, Medicare, defense, unemployment; all of these issues need to be addressed, as this country cannot afford to continue on its present path.  Let me be perfectly clear.  We need to reduce spending!

Suffice it to say that if the US military operated as inefficiently, ineptly and with as little direction as our present Congress, we would still be fighting the Civil War.

So what has been accomplished thus far in facing the realities of the pending fiscal cliff?  For one thing, the POTUS (President of the United States)  asked for and received higher income taxes on higher income wage earners.  You certainly heard his continuous promotion of class envy by using the word “rich” like it was a dirty four letter word during the presidential debates.  Congress approved this increase at the end of last year, mostly hitting families with a combined household income of over $450K per year.  In their infinite, but vanishing, wisdom, Congress also complicated the IRS tax codes by making federal income tax a four-tier process, with a number of caveats at each level.  So much for trying to simplify the tax codes.  The Republicans relented  and approved these increased tax measures on the assumption that the other end of the shovel would be spending cuts.  But now, after getting the increases, the POTUS and the Democrats are balking at any spending cuts.  And of the cuts that they may actually approve, 50% come from the Defense Budget, which is about 22% of our federal budget.   At the same time, the Democrats are trying to preserve all the social welfare programs, which consume well over half of our federal budget.   Stay tuned as to how this will all flesh out.

Last night, Grandma and I attended an investment seminar with a guest speaker from Washington, D.C.  He offered his insight into our inability to compromise and to do what is best for the country.  His theory?  He says that the United States political picture is currently divided into thirds: 1/3 Republicans, 1/3 Democrats, and 1/3 Independents.  The Independents are in the middle, expecting compromise.  The other two parties have gone respectively to the extreme left and extreme right to hold onto the political base that got them elected.  The result of all of this is that the two extremes are our federal representatives.  Gridlock ensues as both sides are too far apart to consider compromise.  Like Nero, they are fiddling in Washington, while the country burns.  I blame both sides.  We need leadership more than ever from people who are incapable or unwilling to lead.   Most people do not want to face the reality that we may all have to sacrifice some, to protect the whole.  In this case, the “whole” is the United States of America.

Originally, I was going to do a post on welfare.  During my research on the welfare programs in the US, I ran across this information as to how our government if functioning in Washington.  The verdict?  It is not functioning for the benefit of the country!  It is working overtime to gain reelection.   I am both appalled and irritated by how our country is being managed.  I must be naive, because I expect more from supposedly smart leaders.  Much of these problems would not exist if we had term limits.  It is obvious that too many selfish, egotistical people feel comfortable “nesting” in Washington.

The next post will be on welfare programs in the US.  These programs are at the heart of possible budget cuts.

Have you talked or written to your Congressman lately?  If the silent majority (the common sense people) do not make themselves known, we become abetters by allowing our government to continue on its present course.

PS:  On Saturday, March 23, the Senate passed a budget for the first time in about four years with a vote of 50-49.  This budget will not be implimented, as it is to diverse from the budget passed by the House.  Stay tuned for more gridlock and ineptness.

Working at Reducing Unemployment

From 1948 until 2012, the average unemployment rate in the United States was 5.8% The highest unemployment rate was 10.8% in November 1982. The lowest unemployment rate was 2.5% in May 1952.

So how is the unemployment rate determined? The obvious simple answer, and the widely accepted answer, is that it is “the measure of the number of people actively looking for a job as a percentage of the labor force.” We need to keep that definition in mind, as it will appear later in this article.

Currently, for December of 2012, the unemployment rate in the US has been calculated at 7.8%. At the beginning of the year, the average unemployment rate in the US was 8.5%. As an aside, the state with the lowest unemployment rate in 2012 was North Dakota at 3.2%.  That is relatively easy to understand.  Small state – newfound oil.  But the two states in a tie for the highest unemployment rate in 2012 were….. Nevada (understandable) and………….Rhode Island! I have not a clue as to why Rhode Island has a high unemployment rate of 10.2%.  Who would have guessed?

In the United States, unemployment benefits are usually called unemployment compensation. Benefits are generally paid by state governments, funded in large part by the federal government to workers who have become unemployed through no fault of their own. This compensation is classified as a type of social welfare benefit. According to the IRS Code, these types of benefits are to be included in a taxpayer’s gross income.

The idea of unemployment insurance in the US began in Wisconsin in 1932. Through the Social Security Act of 1935, the federal government effectively encouraged the individual states to adopt unemployment plans. To facilitate the program, Congress passed the Federal Unemployment Tax Act (FUTA) which authorizes the IRS to collect an annual federal employer tax used to fund state workforce agencies.

Here is a thumbnail sketch of how the federal-state unemployment benefit works. The jobless generally receive up to 26 weeks of state benefits and then shift to federal emergency unemployment compensation, which is broken into four tiers and lasts up to 47 weeks. There is a separate federal extended benefits program, which provides up to 20 weeks, but only New Yorkers are eligible for it at this time. (Really?  How did New York vote in the last presidential election?)

The federal government has spent far more on unemployment insurance in recent years that it had in previous economic downturns because of the unprecendented response to the Great Recession (Not to be confused with the Great Depression). Federal benefits were extended to a record 99 weeks in November 2009. That safety net was extended multiple times until late 2012, when Congress extended the deadline to file, but shortened the duration for which the jobless can receive checks.

How much does all of this cost us? Over the last five years, state and federal unemployment insurance programs have cost roughly $520 billion, according to a Congressional Budget Office report released in late November of last year. That is over a half a trillion dollars!  When it comes to our government, trillions are “in” and billions are “passe.”  That money is spent over and above the monies collected from the working labor force through the collection of unemployment taxes.

This is not the first time this has happened. The “Greatest Generation” also lived through the “Great Depression.”  Common sense tells me that the federal goverment had better programs in the 1930s than it has today.

The Great Depression was a worldwide horrific event. A combination of unemployment, inflation, political instability and climatic conditions all converged at one time and lasted approximately 12 years in the US.  Oddly enough, World War II was primarily responsible for breaking the stranglehold of the Great Depression.  I am by no means advocating WW III to turn our current misfortunes around.

Here is what our government did in response to getting people working during the Great Depression:

Civilian Conservation Corps

The CCC was a public work relief program that operated from 1933 to 1943 in the US for unemployed, unmarried men from relief families. These men were ages 18-25. As a part of the New Deal initiated by President Franklin D. Roosevelt, it provided unskilled manual labor jobs related to the conservation and development of natural resources in rural lands owned by federal, state, and local governments. Maximum enrollment at any one time was 300,000.  In nine years, 2.5 million young men participated in the CCC, which provided them with shelter, clothing, and food, together with a small monthly wage of $30 a month, $25 of which had to be sent to their families. The principal benefits of an individual’s enrollment in the CCC included improved physical condition, heightened morale, and increased employability. During the program’s tenure, volunteers planted nearly 3 billion trees to help reforest America, constructed more than 800 parks nationwide, upgraded most state parks, updated forest firefighting methods, and built a network of service buildings and public roadways in remote areas.

Some of the notable alumnae of the CCC program were:

Hyman G. Rickover, 4-star Admiral, former Corps Area Commander
Raymond Burr, actor (noted mostly for Perry Mason)
Archie Moore, the Light Heavyweight Boxing Champion of the World
Robert Mitchum, actor
Chuck Yeager, test pilot (first human to break the sound barrier)
Walter Matthau, actor
Stan Musial, baseball player

Now aren’t you glad you read my blog?

Civil Works Administration

This program was also a part of the New Deal, and was created in November 1933 to rapidly create manual labor jobs for millions of unemployed workers. The jobs were merely temporary for the duration of the hard winter. The CWA created construction jobs, mainly improving or constructing buildings and bridges. It ended on March 31, 1934, after spending $200 million a month and giving jobs to 4 million people. The CWA’s workers laid 12 million feet of sewer pipe and built or improved 255,000 miles of roads, 40,000 schools, 3,700 playgrounds, and nearly 1,000 airports (not to mention building 250,000 outhouses still badly needed in rural America).

Works Progress Administration

The WPA was another larger New Deal program that began in April 1935.  It employed millions of unemployed people to carry out public works projects, including the construction of public buildings and roads. Almost every community in the US had a new park, bridge, or school constructed by the agency. The WPA’s initial appropriation was $4.9 billion, which was about 6.7% of the 1935 GDP. In total, the program cost $13.4 billion.  From 1935 until 1943, the WPA provided almost eight million jobs. The goal of the program was not for full employment, but to provide a paid job for the breadwinner suffering from long-term unemployment.  In my home town of Soft Rock, two parks and our high school athletic field were all constructed by workers of the WPA. That was pretty big for a town that had a population of less than 700 at the time.

Do not get the impression that these programs did not have their detractors. These programs were under fire and under scrutiny, because opposing politicians thought the projects selected were rewards for some while attempting to buy political support from others. But the end result was that many people, sorely in need of a job, received a job. And the upside as compared to today? The communities, states and the federal government all received something in return for the employment dollars spent on the programs. Now common sense tells me that they had better programs in the 1930s, than we do today. What did the taxpayers receive in return for the half trillion dollars spent on unemployment in the last 5 years. The answer? Butkas. Nada. Zero. Nothing.

So now we get to that sticky point where I comment, “Should we continue with unemployment benefits for up to 99 weeks and continue to expect nothing in return?”  Why can’t we have programs like they did in the 30s? Have we become such a nation that manual labor is considered beneath our dignity?

Our country has become a fairly well-educated country. The following statistics are for the educational attainment in the United States for persons aged 25 and over:

High school graduate 87.58%
Some college 56.86%
Associate/and or Bachelor’s degree 39.89%
Bachelor’s degree 30.44%
Master’s degree 7.95%
Doctorate or professional degree 3.00%

It makes complete sense to me, that our highly educated and, hopefully, evolved elected officials could institute a more modernized version of the 1930s programs.  They can surely make better use of the vast amount of college-educated, experienced, highly qualified people who are currently collecting unemployment compensation.  What a waste of talent!   Many of those 1930s programs were headed by reserve component officers or military men. That would not fly today, but someone, somewhere should have the organizational skills to put these people to productive use in exchange for an unemployment check.

How about this?  We give everyone the 26 weeks unemployment compension and if they cannot find a job, then we give them a job and their pay is the unemployment. Of course, you would want these people to have opportunities to continue to apply for other work. What if we stick them with companies that can use their skills at the government’s expense? They would get 12 weeks with each company, and then move to another. They could possibly be hired by a company once they have shown their capabilities. That would be a win for the government, and a win for the hiring company.

I am a firm believer that everyone is not cut out for college. I also believe that we are missing the boat by not providing technical/vocational training to our high school students. Even though our schools are tailoring their curriculum toward college prep, only 40% of the people have a Bachelor’s or higher degree. We must prepare our students for other vocations.

The government could assist in lowering unemployment by repealing Obamacare. Why?  Because when the act was passed, companies began downsizing to allow for the anticipated 20-25% increase in their total payroll costs.  After all, as mentioned in a previous post, companies are not in business to lose money.  But they did reduce their work forces in anticipation of the implementation of Obamacare, thus fueling the fire of an already bad economic situation.

So now for my more studious readers, I am going to pose this question. If we could magically lower the unemployment rate to zero, would all capable Americans be employed?  The answer?  Not even close! The definition for the unemployment rate in the second paragraph says it is determined by “people actively looking for a job.” We have just under 5% of our country on welfare. They are not looking for a job. So if you were to add that 5% to the 7.8%, the true number of capable people not working is over 12%.  If you think unemployment is expensive, wait until my next blog about welfare.