Author: David S. White

Americans have famously short attention spans. Media frenzy will carry a story for a week or so, maybe a couple of weeks in extreme, unfolding situations, and then Breaking News will sweep that one away for another. TV Talking Heads stations will then come up with compelling names for the story: “Terrorist Horror in Mumbai” or “StormWatch 2008” or whatever, with reporters in network logo rain slickers standing in hip waders in swirling waters, until the next one comes along. You can get caught up in it – I spent much of Thanksgiving’s long weekend watching that horror in Mumbai and I recall vividly wasting an entire Labor Day Weekend horrified, watching Katrina drown New Orleans (to the consternation of family and friends who wanted me to ‘Get a Life’).

Now it’s BailOuts. One explanation for the stunning Congressional denial of a $15 Billion Dollar BailOut to US AutoMakers, after handing over some $350 Billion or so to Wall Street (dare I say, “Pirates,” without giving up journalistic objectivity?) with virtually no strings attached and very little transparency (can you list the recipients of that money and how much each received?) is BailOut Fatigue. Enough already with the handing out of my and your hard-earned, but apparently easily spent, taxpayer dollars.

After days of fussing, fighting and fretting, the Senate has failed to pass the BailOut for at least GM and Chrysler (Ford says it is fine for now) and, echoing the famous headline when President Gerald Ford told NYC it would get no BailOut ("Ford to NYC: Drop Dead"), they may have condemned us to an even worse economy – right in time for Christmas.

As I write, the stock market is about to open – bang – down 213 points on opening on lousy futures and bad Asian results last night. The Bush Administration is making noises about finding some TARP money for the AutoMakers, but, that may not save this Friday’s market, which may be headed for even more trouble.

Did the Senators who opposed this do so to favor their foreign AutoMakers resident in their Southern states, who are not exactly CarpetBaggers, having been there already some 20 years. When does a foreign AutoMaker become a US AutoMaker? Can they apply for a Green Card?

And now the dire bankruptcy talk begins – what will happen to all those GM car, SUV and truck warranties? What will be the ripple effect on job losses throughout the economy?

While I often write here of things monetary, of BailOuts, economic freefalls and the current recession that is trying all of our patience this Holiday season, I could not resist this headline-hijacking story breaking early this week. Perhaps it might even cheer up somebody somewhere struggling with this economic crisis to know that somebody else is having a harder time of it, all self-induced and due entirely to his own human foibles. Bring on the circular firing squads!

The Gods of Felony Dumbness and Arrogance met, mated and had a bouncing baby boy whose name is hard to spell, but whose hairdo, for a 52-year old, is truly awe-inspiring, and who just happened to become the current Governor of the Great State of Illinois, Land of Lincoln.

And boy, does he have a deal for you! Better than all the Bridges, swampland in Florida, Nigerian email schemes, and other investment scams – you can now, for a limited time only, buy your very own Senate seat – only slightly used by a Senator who spent much of his freshman term jetting about the country in a nearly two-year long, and ultimately successful campaign, to become our next President.

And, if you act now, we will throw in these handy kitchen towels and this steak knife.

The Treasury announced Tuesday that it has sold $30 Billion in four week T-Bills at an interest rate of 0%. That’s right, zero, zip, zilch, nada – you could put your money under your mattress and do as well. In fact, when investors then traded T-Bills with each other, as investors are wont to do, the yield sometimes even went negative! This is the first time since the government started selling these notes in 2001 that this has happened and people all over are shaking their heads over the obvious fact that investors are dying for safety right now over all other things.

The idea of having a Tax Holiday for all Americans, instead of just giving away another $350 Billion to the FatCats, is the brainchild of Rep. Louie Gohmert (R-Texas)–Check out Human Events for Rep Gohmert’s 12/5/08 piece titled: “Help Me Give America a Tax Holiday.” Gohmert is a former Judge, now Congressman, whose Texas district sits atop the legendary East Texas oil field, largest in the continental US, and who sits on three House committees: Judiciary, Committee on Resources and Small Business.

Yields on the 10-year Treasury note and 30-year bond hit their lowest points in 50 years on Thursday. Oil prices fell for the sixth month in a row. AT&T announced that 12,000 people, 4% of its workforce, have no more jobs, just in time for Christmas. The number of people in the US receiving unemployment benefits hit a 25-year high.

Retail sales, except Costco (up 5% year over year) crashed and burned in November. A share of Ford stock won’t buy three songs on ITunes and GM’s stock, per share, will just get you just over four songs. US AutoMakers’ CEO’s were back panhandling Congress, one making a reported $50 million per year, this for losing Billions, over and over again, all now willing to work for $1 per year if Congress will let loose those $34 or 35 Billion they now want. Chrysler and GM said they might not make it long enough to sing Auld Lang Syne this New Year’s Eve if they don’t get those Billions right now.

“I’m free, free fallin”

“Yeah I’m free, free fallin” – Tom Petty ©EMI April Music, Inc.

“The fourth quarter of 2008 is experiencing an economic free fall,” pronounced Richard Dekaser, Head Economist of National City Corp, Cleveland, adding “we haven’t this kind of collapse in a very long time.” (Yahoo News, reported by Steven C. Johnson). And we haven’t even heard the dreaded government report on jobs lost in November which will come out this Friday, the number of which some expect to clear 300,000 and then some, the worst since right after 9/11.

Once upon a time, US currency was actually backed by gold and silver and you could redeem paper money for its equivalent in these precious metals. During the Depression that all changed with the Executive Order signed on April 5, 1933 by FDR "forbidding the Hoarding of Gold Coin, Gold Bullion, and Gold Certificates," and requiring everybody on or before May 1, 1933 to deliver all gold coin, gold bullion, and gold certificates to the Federal Reserve in exchange for paper money.

Then, in 1944 the Breton Woods Conference agreed upon a gold standard, the US fixed the value of gold at $35 per ounce and the rest of the conferees fell in line until Nixon in 1971, squeezed by financial pressures of the Vietnam war, un-fixed gold from it’s $35 per ounce anchor and detached our currency from any gold standard at all. Ever since, it’s just been paper, backed up by the US government’s promise to make good.

Well, that is all up for grabs now, as are so many other things. T incoming Obama Administration has boldly gone into the fray and conjured up a stimulus package the size of the September Bailout, another $600 to 700 Billion dollars on top of that September $700 or 750 Billion dollars.

Like we needed to be told. The gurus of such things, the U.S. National Bureau of Economic Research (NBER) announced yesterday, finally, that the US has been in a recession since December 2007. The Dow promptly celebrated by dumping nearly 680 points in a day’s trading, shedding some 7% of its total value, giving up all the gains of the five ‘up’ days and the manufacturing statistics are simply horrible. Way to state the obvious!

The NBER defines a recession as “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP growth, real personal income, employment (non-farm payrolls), industrial production, and wholesale-retail sales.” Alternative ways of telling when a rescission is afoot is a decline for two or more successive quarters of a year in gross domestic product (GDP), or negative real economic growth – others believe this is to simplistic. Most say this will be a doozey, rivaling those in the early 80’s or even worse.