Picture a great fighter with a trainer poisoning his water and his opponent giving him more and more body blows that the fighter has been absorbing. Suddenly those body blows slack off and the fighter shifts away from his opponent so that an upper-cut whiffs by his nose. Then the fighter lands a jab straight smack-dab in the face of his opponent. The bell for the round rings, the fighter staggers back to his corner gaining strength and his trainer hand him more poison to take plus starts to apply leeches to his body.
The fighter? The US economy.
Its foe? Recession hoping to become Depression by knocking the economy out.
The trainer? The US Congress, Federal Reserve and Treasury Board.
The body blows? Oil prices taking a bite out of each family's budget.
The poison? The various noxious potions put in with the Community Re-investment Act, pushing and through lax lending laws to Fannie and Freddie, and then complaining when regulators try to stop the trainer from putting more poison in the fighter's water.
The leeches? All the hanger-ons that have been pushing for the poison to be put into the fighter so they can be applied to sap its strength... folks like ACORN and La Raza's housing groups, those other lenders that actually did *not* practice fiscally sound lending at the behest of Congress, and, of course, all the lobbying groups benefiting from this.
The additional poison? Bailouts for those already poisoning the economy plus a fully different form of it from the Federal Reserve looking to intrude on transactions with non-banking institutions like those making auto loans, student loans, and private credit card organizations, plus auto companies and the UAW.
The jab? Well that is interesting as all the high-rollers are bemoaning a loss of wealth, it is the folks with the most to lose, the ones at the bottom end of things, who are out spending money at Target and Wal-Mart this last month (source: CS Monitor 15 NOV 2008). Yup, that is a counter-punch.
Remember all those body blows being handed out at the start? All that stuff hitting the day-to-day expenses due to incredibly high oil prices? That hits first and hardest at the lowest end of the working household spectrum, as it directly shifts cash out from other things into transportation. Say you get 20 gal. of gas twice a month, or 40 gallons per month. The cost of that at $4/gal. is $160/month. At $2/gal. it is $80/month or a net monthly change of +$80 now floating around per month. When I had a short commute in my old car years ago, it was about just that in fuel used. I can see a family of four going for at least 2.5x that amount due to a second adult using a car plus all the things needed to be done for 2 children. Using 2 cars that average that usage would cost $400/month at $4/gal gas and $200/month at $2/gal gas, or a net +$200 to now use elsewhere in the budget.
Do these folks normally shop at Best Buy, go to Starbucks or hit Macy's for their shopping needs? No, they don't, and some 'big ticket' items like washers, dryers, refrigerators and stoves may have been put off for 8 month or so due to higher gas prices. Suddenly there is leeway back in the everyday budget of the average family (2.56 people per family) and multiply that by the number of families (116,000 in thousands, or 116,000,000) in the US (source: US Census 2007 estimate) and you get the idea of what is going on. So ratchet the amount down per family from 4 to 2.56 (and my guess is that 2x doesn't cover that so I will stick with 2.5 which covers family members) and you get: $23.2 billion/month now going back into the economy. Yeah, that $200/month/family makes a huge difference when you put in the number of families. Not new home level, no, but making up for things not done, yes.
That is *without* Congress doing a damned thing to put the government into debt - it is a natural happening outside of the housing market where Congress has been interfering.
Were car sales sluggish over the last few months before the steep oil price drops? Yup. And will Americans learn their lesson on gas guzzling cars? Maybe, this time it was a hurt that got a minority into deep trouble after already taking loans they couldn't afford for housing. Still those families have very little invested *in* housing, due to the types of loans, and walking away from *those* to buy gasoline makes a ton of sense. It is that sector of generally poor Americans living on a tight budget that had these impossible loans pushed at them, and they couldn't afford them: the oil shock just brought that home much, much faster.
Now, of course, Congress wants to hand out more of your tax money to companies and organizations that have *not* adjusted as well to the changing technology and driving habits of Americans. Plus those that offered Politically Correct, Economically Insane loans to NINJA (No Income, No Job or Assets) borrowers. This is known as a 'political payoff'.
Also it is corrupt to have public officials not pushing for good stewardship of the economy so that their political favorites can benefit from it.
The MSM has been going down with this ship as it has not adjusted to new technology, either, and has not covered, purposefully, political corruption on the part of political candidates and officials from the Democratic Party up to, and including, the President-elect. If you look at the people surrounding the position of that top job, you see the same old Politically Corrupt PC politicians, lobbyists and 'activist groups' that *caused* this mess in the first place. Now they want to cover their tracks as the first fight ends and an encroaching mob of bullies, thugs, killers and loan sharks come cruising by the fighter's locker room asking for their part of the prize money. And all the trainers, brown-nosers, and those cheering in the fighter's corner look at the goodies of the prize money that he won... which is his... that they will take from him for their own benefit.
I am doing my bit by supporting firearms and ammo sales... because the gloves are coming off and we are far from the ring... and I don't like the look of the new thugs coming up.
This is not 1928 but 2008... and in those 80 years there have been lessons about abuse of the State for fascistic motives to support big business and suppress the common man. Apparently those in the Elite of the political parties haven't learned that lesson and are trying to repeat it.
Americans have one answer, and one answer only to No Taxation Without Representation.
Want to bail out the auto companies? Gimme a piece of the action and a share stake in each of them - I can exercise that better than any Congresscritter or regulator or grand poobah ever put into power. The UAW can damn well open its books, stop pushing to end the secret ballot and stop acting like thugs... plus be accountable to a share stake held by each citizen in IT. Ditto AIG. Ditto the other large banks and lending institutions and whoever else they want to bail out.
I don't trust ANY Congress, ANY President, ANY Bureaucrat with that sort of economic power as we did not give them that power to hold.
You want to tax me for this?
A piece of the action.
And make these bastards answerable to the American People DIRECTLY.
Government need not apply.