The Great Recession

I rarely listen to Sean Hannity on the radio. He’s a bit too intense and in your face for me. However, I heard him mention talking to the author of this article and tuned in to listen: The Great Recession of 2011-2012 (Wayback Machine).

It is very interesting reading. The most important bit I took away from it was the fact that there is no going back to the way things were the past 50 years. It simply isn’t possible.

A few good snippets:

The new certainty that both men would have recognized, and that we must confront, is that the era of cheap resources is over. The plentiful and extremely profitable supplies of everything—petroleum, metals, minerals, water, yes, and even air—have been exhausted. While we had them in abundance for a period of nearly three centuries the world was an ever-expanding place, a cornucopia that human ingenuity fashioned into ever more wonderful machines and the human spirit used to subsidize the expansion of opportunities and entitlements we call “rights” to all mankind.

THIS IS NOT TO SAY the lights are suddenly going to go out all over the world. Those who use the “peak oil” argument to say we have exhausted the globe’s oil reserves are wrong. It does not really matter whether there are two trillion barrels left or (more likely) 10 trillion barrels of petroleum still lurking under polar ice caps or offshore Brazil or in the South China Sea. We will have petroleum energy supplies aplenty from shale and other high-tech processes too. But it will be expensive and hard to get, and it is that extra expense of the getting that robs us of the subsidy that made so much of the industrial West’s prosperity—and indeed its political culture and civil promises—so possible.

and

It will get ugly, make no mistake. How ugly? Wait until those things we consider “rights” start to get squeezed in the interest of what our ruling politicians decree as the national interest. The uproar that greeted the mere suggestion that health care resources for the elderly might be circumscribed was genteel debate by contrast with what’s ahead. The notion that rights can be rescinded as easily as they have been obtained is not a happy thought. Case in point: my mother recalled that she and my father had to marry in secret and she continued to live with her parents throughout 1936 because the New Dealers who controlled the Pennsylvania state legislature had decreed that no married woman could be a public school teacher or hold another state job when a jobless married man could take her place. Try that out on the next dinner table debate you attend and see how many bread rolls get thrown at you by women who are convinced that it can’t happen again; times have changed, they’ve come a long way, baby. Well, yes. Nowadays most women don’t have the option not to work.

What boggles my mind is that so much of this info is news to someone like Hannity. Average people with blogs and websites have only been writing about this stuff for years. Same thing with the housing bubble. Anyone in any related business who says they never saw it coming is either an idiot or lying. I can understand why the average Joe on the street might not have seen it coming. But government, banking and other officials? You have to be joking.

Anyway, the guy on Hannity was interesting and sounded very level-headed. His piece is long, but well worth a read.

Then after you read that, consider these:

• Nationwide Strike Paralyzes Greece (This is what is down the road we are headed)
• A quick tour of hyperinflation and the possible consequences for America (a good, easy to understand primer if you don’t understand hyperinflation)

I haven’t written much about the economy, the recession and such lately because I’ve cut way back on my reading about those topics. I’ve even avoided blogs I enjoy if the author is prone to writing about those things frequently. There isn’t much good news out there so I’ve just started avoiding it altogether.

However, it has been impossible to avoid the General Motors (GM) news. I know for many people it is just another company that has gone under. But not for me. I grew up in Michigan in a GM family. My dad is a GM retiree. My father-in-law is a GM retiree. It would take more than two hands to count all the family members and friends we have who are either retirees, employees, or are in companies closely tied to GM. There is no way you can be a life-long Michiganian and not have lots of ties to GM.

There’s plenty of blame to go around and I don’t have the time or energy to sit here and try to figure out what went wrong. I just feel sad and concerned for those I know who have been impacted by this. If I feel anything the most strongly it is a major sense of disillusionment that people who worked their entire lives for a company are being treated like dirt. That a company with so much over the years is now telling people when they most need it that they won’t be getting a lot of what they were promised.

I’m sure many people outside of Michigan and outside of the auto industry look at the situation differently.  But for people to work decades for a company and then be told when they are beyond the age of working that they are not going to receive what they were planning on is criminal in my opinion.  But then so much of what is going on right now is criminal whether it is in the auto industry, banking, government or whatever.

David and I have continued to cut back our spending as we don’t see any hopeful signs of a recovery in the near future. We’re choosing to not renew things like our zoo membership next week. We’ve not bought clothes except necessities that had to be replaced. We’ve pretty much stopped eating out except for a mocha when we’re on the go or a special deal on a carryout pizza. About the only extra area where we are still spending is learning things for Caroline and even then we are buying a lot less than we might under different circumstances.

We’re fortunate that our situation is not desperate like so many people’s. And we don’t have to worry about ending up on the street if things get tough. We’ve joked for several years about moving into my parents’ basement if times got tough. (They have a larger house with a fully-finished walkout basement with multiple rooms.) It’s always been kind of a joke as we’ve anticipated the housing bubble bursting and the stock market tanking, things my dad has been predicting for years. But lately I’ve started wondering if the joke might turn real at some point.

So, anyway, that’s some things I’ve been thinking about lately. I don’t plan on writing much on this stuff because it’s frankly really depressing and I don’t think beautiful June days should be wasted on such stuff. But there are a lot of people struggling and hurting out there. I’m sure some of the people reading this are facing some very difficult situations and choices. And I don’t see things improving anytime soon. But I’ll sure be glad to be proven wrong, if I am.

I haven’t written much about the financial mess in the U.S., mostly because I’ve just been too focused on other things to take the time to write a coherent post. I could’t even begin to address everything that is going on.

I’m sure that it will come as no surprise to anyone who has been reading this blog or my previous blog over the past three years that I’m not at all surprised by what is going on. I’ve discussed the housing bubble a few times starting in August 2005 and April 2006. I discussed the mortgage crisis and why it might be a bad time to buy a house back in May 2007. In July 2008 I even went out on a limb and said that I think we were headed for a depression.

Last night when we went to bed, David was feeling rather stressed about the whole thing. I felt a little anxious about it, but more than anything I felt fascinated. Fascinated because something I had been reading about and pondering for over three years was unfolding before my eyes. Perhaps it is that morbid fascination akin to slowing down to look at a wreck on the highway, but I don’t know how else to describe it.

There isn’t much I’m going to say about the whole thing except that there is no way – NO WAY – TPTB (the powers that be) didn’t see this coming. They saw it coming and did nothing to deal with it until they had absolutely no choice. I’ve been reading The Housing Bubble Blog for well over three years now and those people who discuss over there had this thing NAILED. I mean completely NAILED. Even I understood what was going on and I am not a brilliant person at all when it comes to finance. And I’m not just talking about the housing bubble. They have nailed the whole financial mess.

The fact that a group of people on a blog had this thing all figured out a couple of years ago is what I find so fascinating. They have discussed at length over and over and over again what was happening, how it would play out, etc. They perhaps didn’t have every detail figured out such as dates, but the general unwinding that would occur and huge financial fallout in our economy – absolutely nailed.

I have no idea what will happen from this point on. For one thing, TPTB keep changing the rules and acting in many irrational ways. But this is way bigger than can be controlled and manipulated by any one man or small group of people in power. They can keep fiddling with things, but, in my opinion, they are only delaying the inevitable.

Sorry to sound so gloom and doom. I actually am not as down about this as I might have expected. I actually feel relief that it is finally “happening” so it can happen and we can get on with moving forward. Bring it on so we can start moving in a new direction.

I thought I would just open up a discussion here for people to vent, talk, whatever. My only request is that you vent respectfully and in a manner worthy of the name of Christ. As David says, Jesus cursed the fig tree so anger isn’t wrong. It just needs to be expressed appropriately. And remember that God is still on His throne. None of this is any surprise to Him.

So what is your take on things? What are you seeing where you live? How are people around you responding? How are you doing?