Nov 14 2008
Does all this talk about how awful the economy is performing actually make matters worse?
Nearly every economic indicator had slowed before the middle of September 2008. Then came word of the failure of Lehman Brothers, the government takeover of Fannie Mae and Freddy Mac, and the threat of cascading failures in the mortgage securities industry.
In a whirlwind, amid the last few weeks of a presidential election campaign, Congress authorized a $700 Billion Wall Street bailout package that was supposed to stop the bleeding. It didn’t. Punctuated with occasional wild rises, the Dow Industrial Average plunged, and with it, the retirement savings of most Americans. Foreclosures dominated the news. Unemployment rose. Industries singing the blues started lining up on the steps of the capitol, hoping to get in on all those government giveaways.
As we ordinary folks watched all of this, we were bombarded by news reports about how bad things are, and how much worse they might get.
We are told of a housing bust, the most severe since WWII. We are told about the largest free-fall on the stock market since the Great Depression. We are warned that gasoline prices could spike to $5 a gallon or higher. We are told that retailers are looking at a holiday season that will be a “nail-biter”. The prognosis, we are told, is not good, and the uncertainty is killing us.
The nation’s financial problems may be intense right now, but consider that while all this has been going on, the restaurants are full, holiday vacations are being booked, recreational vehicles still tow SUVs down the nation’s highways, and many consumers are still buying things.
If there are soup lines, they’re well hidden and I’ve seen few folks riding the rails in the last few weeks. We are in a recession, and it is painful for some, and could become painful for more of us, but contrary to dramatic media reports, we are not aboard a financial Titanic. Careful personal financial practices are recommended in these uncertain times. Fear is not needed, and just makes everything worse.
(3 votes, average: 3.67 out of 5)
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