Year-end Musings...

As we begin the final month of another year it begs a reflective mood on where we've been as a nation, where we are now and where we hope to be in 2010. On the economic front, we have seen the very worse of the Great Recession that officially began in December 2007, twenty-two consecutive months of job losses, unemployment reaching a 26-year double-digit high of 10.2 per cent, the bankruptcies of the once mighty General Motors as well as Chrysler, not to mention perhaps thousands of smaller businesses, a collapse of the credit markets, bailed out banks tightening credit standards including reducing credit lines and jacking up credit card interest rates even for their very best customers, rising personal bankruptcies, record foreclosures, 124 bank failures to date and record budget deficits. Optimists would balance all of this with the rise in the stock market, once again surpassing the 10,000 barrier, some positive GDP numbers (albeit inflated by substantial government assistance), an uptick in housing sales and some leveling off in values, low inflation and near zero Fed discount rates, the price of gold at over $1200 an ounce and an increase in the overall consumer savings rate. Politically, we inaugurated the nation's first African-American president under an aura of hope and change for the better along with an ambitious legislative agenda for a new, Democratically-controlled Congress, a $787 billion economic stimulus package for which the jury is still out, long-needed health care reform on the precipice, and, tonight, the announcement by President Obama of an escalation of 30,000 more troops committed to Afghanistan (at an additional cost per soldier of one million dollars each per year).

These are just some of the highlights ( or "lowlights" depending on your perspective) of the past year up to the present. Granted even weighing in what good we can with the bad there are enormous challenges before us so what can we hope for in 2010? First and foremost in my mind, there needs to be a serious and determined refocus by government at all levels on the unemployment crisis in this country. The upcoming Obama "jobs summit" would appear to signal a recognition of the magnitude of the problem but we need a major creation of real job opportunities through a concerted partnership of government and private business to put a meaningful dent in the crisis that exists. Waiting (and hoping) for the trickle down of the Obama stimulus package with its flawed counting of "saved" and new jobs is not the answer and what accumulated successes could ultimately result are taking too long. Whether it's tax credits for new job creation, shaming businesses who are taking entire operations abroad for cheaper labor or creating some sort of Office of National Employment to create new public service jobs along the lines of the New Deal's Works Progress Administration, something major needs to be done and it needs to be done quickly. The struggles of millions of unemployed and underemployed workers in this country is a national disgrace, not to mention the economic cost of lost tax revenues, the cross-industry domino effects caused by the absence of consumer spending and the resulting draconian cuts in much needed social services by governments like senior citizen, mental health, rehabilitation, extreme poverty and law enforcement/fire protection safety nets. Not only would such ramped up job creation efforts immediately improve the well being of millions of citizens but isn't it the morally responsible thing to do, especially at this "giving" time of year?

And speaking of the morally responsible thing to do, my second most desired wish for 2010 would be for the Congress to finally end the gridlock, bickering and political theatrics and finally pass some sort of health reform legislation early in the year. I don't think there is any argument whether one is Democrat or Republican that reform is badly needed. There are probably thousands, perhaps millions of documented stories of excessive hardships and even tragedies from the current system--treatment denied because of cost or pre-existing conditions, insurance company snafus, on and on--practices and consequences that continue while the debate needlessly drags on. Yes, there is a cost and I feel compromise is possible on the lightning rod issues of payment for abortions, immigrant coverage and some sort of limited public plan. But isn't the cost for doing nothing measured monetarily and in public pain and suffering potentially so much greater? Please, Congress, let's pass a meaningful health care reform package soon.

My comprehensive wish list for 2010 includes other items--financial institution regulatory reform allowing us to avoid a repeat of the late 2008 meltdown stands out as my number three--but if we could only get the leadership, compassion and understanding to come forth on the issues of the unemployment crisis and health care reform, the quality of the lives of so many Americans as well as the overall psyche of the country could be improved immeasurably now and well into the future.

Reading the 2009 Election Tea Leaves

The usual Washington talking heads and spin doctors have had a field day over the last 48 hours chiming in on what this past Tuesday's election results really mean. Were the governor losses in New Jersey and Virginia a voter rebuke of the policies of the Obama administration and/or the Democratically-controlled Congress? Or on the other side of the political spectrum, was the defeat of the Conservative Party candidate in New York State's 23rd congressional district, supported by conservative mavericks Sarah Palin and Glenn Beck, by a Democrat resulting in the loss of a Republican seat for the first time in a century a shot across the bow for the ideologically split Republican Party? I would contend that the results of these three elections do not mark a trend in either political direction but rather a reflection of the deepening disconnect felt by the American mainstream electorate over the continuing partisan gridlock in Washington and state capitols across this country, and the failure of governing bodies to address more pressing domestic issues like persistent unemployment/lack of jobs and health care reform. Frankly, many Americans, especially a growing Independent block, are becoming increasingly disillusioned with both parties and unless there is a genuine recognition of the plight and frustrations of a majority middle class soon the 2010 midterm elections (and beyond) could result in an irreversible "vote all the bums out" mentality.

Nowhere is this disconnect more evident than in the state of the economy (a factor, by the way, reinforced in numerous election exit polls). Despite the steady stream of "improving" economic indicators released by the government and reported by the media--admittedly, in many sectors like housing and auto manufacturing artificially inflated by government stimulus efforts--the unemployment situation in this country and unavailability of good-paying jobs remains a very serious crisis. Wherever you read, jobs are still being slashed in both the public and private sector and no new jobs are being created. The stock market has shown signs of life in recent months with companies reporting profits but largely because they continue to cut to the bone on expenses and reduce payrolls, not because of a growing demand for their products and services. Despite the government's urging, businesses note in independent survey after independent survey that they are still extremely cautious about hiring/rehiring staff in the present environment. Unemployment numbers have dropped in many areas of the country not because new jobs are being created but because of the antiquated statistical methodologies used by government agencies to report the unemployment numbers where many long-term unemployed have given up searching for non-existent jobs while many others who need full-time jobs are forced to take part-time jobs at a fraction of their previous pay. Younger voters (18-29) who came out strongly for President Obama in 2008 in Virginia, for example, comprised only about 10 percent of the vote in 2009. Why? Well, so many in this demographic are unemployed or underemployed and are more concerned about paying for everyday living expenses and paying off their huge public/private student loans now that their payment deferral periods have passed. Notably, a Wall Street Journal story reported recently that less than 50 percent of this age group that are able to work even have a job commensurate with their college educations. At the other demographic end, many experienced and talented workers over 55 downsized due to this economy cannot find suitable, good-paying replacement jobs because of not-so-subtle age discrimination. Many financially able to do so are taking early retirement while others less financially fortunate are trying to hang on until they can take early retirement at 62, which is creating its own problem placing even more pressure on an already distressed Social Security system and the coming tsunami of Baby Boomer retirements.

And a few words here about the ongoing partisan debate over health care reform. While Washington fiddles, the ("burning") obvious problems of affordability, increased costs, the plight of the uninsured and under insured, etc., continue unabated. Health care premiums continue to rise and more employers are shifting a greater percentage payment burden to employees who already see their wages frozen or hours cut by the recession. People continued to be denied coverage due to pre-existing conditions, see costs reaching or surpassing maximum policy caps or are just rolling the dice opting for no insurance out of necessity. Recent reports indicate that passage of a true health reform package could be delayed into 2010, an election year. If this scenario materializes, health care reform will probably be even further delayed (if it's ever enacted at all) because of the traditional nervousness of legislators wary to vote on anything the least bit controversial in an election year.

How do you read this year's election tea leaves? One would like to be optimistic--it's the American way--but for too many during these days the realism trump card rules. Huge numbers of people need help and jobs not political posturing. The sooner all the politicians and governmental officials finally realize this, the better for them but, more importantly, the better for this country.

Think Long and Hard Before Escalating Troop Levels in Afghanistan

Internationally, one of the most controversial issues facing the Obama administration today is whether or not we should commit up to 40,000 more (or a lesser number) American troops to a recalibrated war strategy in the country of Afghanistan. There are emotional arguments on both sides of the issue but for the economic well being of this country in both the short and long term I would argue that the seriousness of our domestic problems trumps any perceived benefit to dedicate another "surge" to this part of the world. Afghanistan is a poor and rugged country with a corrupt and inefficient government that oversees a populace of mostly illiterate people. U.S. troops have been seeking out the Taliban/al Qaeda terrorist sympathizers for over eight years now. U.S. war dead now number nearly 800 with hundreds more wounded. At one time it appeared that the U.S. mission had achieved some success with the Taliban presence in the country supposedly weakened and many reported high level al Qaeda leaders killed or on the run and/or taking up new residence in neighboring Pakistan. More recently, however, it appears that the Taliban forces have become more bold with greater numbers and weapons, including an increased implementation of the dangerous IEDs that have claimed so many American lives in Iraq. From a military perspective, it is not a surprise that the thinking of military leaders would be to counter the Taliban's boldness with more American troops. But how many more would be enough? Will an additional 40,000 be enough or after this surge will military leaders then claim that they'll need another 40,000 or even more fresh troops to accomplish a successful mission? What criteria will define a "victory with honor?" When will it stop? I'm no military expert but history and the military mind have shown vividly in Vietnam and even Iraq that no number of troops is ever enough and more requests in the future are almost inevitable. After Iraq, the current unprecendented economic times at home, mind-boggling trillion dollar deficits and a country mired in political gridlock can we afford a major escalation in Afghanistan at this time? I respect the views of others and am truly thankful for the sacrifices of American military families wherever loved ones may be stationed throughout the world, but I fear that the military thirst for more will never be quenched and decisions need to be made for a more rifle shot focus of the al-Qaida core be this in Afghanistan or Pakistan. Then governmental leaders need to shift its "war" effort to right here within our borders to create jobs for the millions of unemployed, ensure affordable healthcare for all, stamp out hunger and homelessness, upgrade our infrastructure--roads, bridges, the utilities' grid, raise the standards of public education to the heights of other countries of the world, on and on. Yes, we need to think long and hard about Afghanistan and whether increased troop levels will truly make a difference. One could argue whether any troop level, no matter how high, will ever be enough to combat world extremists and/or their sympathizers who are now surgically implanting explosives into their own bodies taking suicide bombing to an almost unthinkable level. America cannot do it alone and the problems at home need the greater attention and financial support at this time. I fear negative forces more within than those in a distant part of the world.

It's the Economy, Stupid

Long the campaign battle cry of many a political contest, no words could be truer in today's economic climate. Recent polls indicate that the economy is the number one concern of Americans today--perceived more important than health care reform, national security and/or other pressing domestic or international issues of the day. So why doesn't the Obama administration declare a war on unemployment just as previous administrations have against drugs, cancer, AIDS, poverty, inflation or other major areas of public concern? Statistics reported by the government do not tell the whole story, especially of the thousands who have at least temporarily given up their new job searches in total frustration. While President Obama, Fed Chairman Bernanke, various economists and others in high ranking governmental positions want to believe that the Great Recession has hit bottom, jobs are still disappearing and not enough new, meaningful ones are being created, banks are still failing with the FDIC deposit insurance reserve once over $50 billion now less than $10 billion, and the auto and housing industries still very fragile despite being artificially pumped up by the "Cash for Clunkers" program and an $8000 first-time homebuyers tax subsidy that is scheduled to expire in November. And, most importantly, consumers, who have historically led the country out of past recessions (where experts proclaim that 70 percent of the U.S. economy is fueled by consumer spending), still aren't spending because too many that are fortunate enough to still have jobs are afraid of losing them, face furloughs or have had their hours drastically cut. The vast majority of jobs already lost are lost forever and so goes the spending of the millions of people who once held these jobs or who are now underemployed with temporary, much lower paying jobs forced to purchase just the necessities to survive. Major retailers have already announced plans to scale back seasonal holiday hirings even below the depressed levels of one year ago when the bottom really fell out for consumer spending. So many other employers are still playing a "wait and see" strategy or have announced salary freezes and/or already "no raise" policies for 2010. Where will the spending come from? And the misery index is still high. Despite low interest rates, even prime borrowers/businesses cannot get loans due to extremely restrictive underwriting standards or reduced or eliminated credit lines. Government-backed loans comprise a huge majority of all residential home loans being granted in today's environment; loans that must adhere to Fannie Mae and Freddie Mac agency standards while these governmental entities themselves continue to bleed billions in losses even after being nationalized in late 2008. In light of all of the other government bailouts (banks, auto industry, etc.), how much longer can the federal government continue to backstop the purchasing of mortgage securities that fuels this housing finance? Housing sales numbers are also artificially inflated by the forced bank sales of thousands of underwater mortgages (where the owners have walked away due to loan balances exceeding the home's market value) or the continuing flood of home foreclosures now affecting even the most prime loans due to borrower unemployment or catastrophic health care indebtedness. I'd like to be the eternal optimist just like the next person but there are just too many holes in the optimist's argument today. Not to downplay the importance of health care reform, the tremendous need for infrastructure improvements, or supporting our troops in harm's way, I, for one, believe that the economy should be this country's number one priority at this time--responsible and responsive lending to qualified borrowers by the nation's banks, hiring the unemployed with targeted tax breaks for corporations or small businesses, etc.--whatever the country needs to get back on track to real prosperity supported by realistic measures of economic health and not sugar-coated for political expediency. The stakes are too high and the problem too great not to give it the attention it truly needs. Yes, it is the ECONOMY, people! Is anyone listening?

A Question of Morality

Perhaps my viewpoint is biased because I sympathize with the millions of professionals currently unemployed, but are there others out there who like me see a decided increase in the number of heart-rending stories from "ordinary" Americans struggling to survive from the effects of a recession predicted by experts to be over? We've lost millions of jobs during this recession, and not just the blue-collar type that have constituted the rolls of previous recessions but a new breed of long-time dedicated workers across many age groups and from higher income levels. And, tragically, a vast majority of these jobs are lost forever, never to return again. With noticeable new job creation still months or years away, you now have a tremendous pool of experienced and qualified workers applying in huge numbers for the small number of jobs that remain. Often competing against hundreds or thousands of applicants for any one job opening, you have executives competing with young people for summer, part-time jobs or for step-down, blue collar janitorial jobs, retirees adversely affected by challenging financial markets having to come out of retirement seeking jobs, stay-at-home moms reentering the workforce, long-time, usually secure government workers at all levels downsized due to reduced revenues and program funding cutbacks joining the ranks of the unemployed for the first time, as well as individuals from hundreds or thousands of failed small businesses (i.e., victims of the Great Recession, denied new bank loans or facing reduced/eliminated credit lines, unable to afford health insurance for themselves or their workers, etc.) forced to return to the overall, generalized labor pool. And what about the thousands of recent or soon-to-be new college graduates entering the workforce, many needing jobs to pay back the thousands and thousands of dollars of student loans they have incurred to earn their college degrees, a burden most will have to bear for years to come? Where are the new jobs for this vastly expanded labor pool of new workers, unemployed and underemployed going to come from? I'm not sure even the most celebrated experts can answer this with accuracy. Suffice it to say, the wait will be long for even those financially able to weather the storm. But for thousands, perhaps millions of others, the waiting period has already or will soon expire. For so many workers thrust into the nightmare of unemployment for the first time in their lives, their rainy day savings are already gone, they have had to deplete their retirement nest eggs to survive, they have already or will soon exhaust their unemployment benefits or are being forced to turn to credit cards or temporary family loans to support everyday living expenses. Can more be done by others more fortunate in society, business leaders or in governmental power positions to help? To me, this is a deep-seated moral issue and is the greatest challenge facing our country today, bigger than health care, bigger than the environment, bigger than national security and bigger than Iraq or Afghanistan. It is a cancer within and I pray that someone is listening.

Financial Reform Still Needed

Today marked the one-year anniversary of the financial calamity on Wall Street that nearly took down our financial system. President Obama marked the occasion by delivering a speech directed at Wall Street saying, in part, "We will not go back to the days of reckless behavior and unchecked excess." For our country's sake as well as the welfare of millions of its citizens I hope the President is correct in his prediction. But I fear the reform effort that at one time was embraced with fervor by the Obama administration and certain key congressional members like Senator Chris Dodd, who chairs the Senate Banking Committee, is losing much of its steam. I read in the Wall Street Journal and other publications that some of the same risk-taking, exotic financial instruments and trader big bonuses are returning to the Wall Street landscape. Big banks including Goldman Sachs, who along with other "too big to fail" banking institutions that received huge federal taxpayer bailouts are seemingly flaunting inflated profit numbers with some of the same excesses of the past, despite the President's optimism, including penalizing their very best customers with new fees, increased interest rates, dropping credit lines and overly restrictive loan underwriting standards. While the overall financial environment has certainly improved from its near disastrous plunge of one year ago, can we now afford to sink into complacency and lulled into some false sense of security? No. I feel that the financial system is still fragile and it is more important now than ever to promote the cause of reform while the "iron is hot." Yes, health insurance reform is important as are other administration priorities but government and congressional leaders cannot lose sight of the pressing need for financial reform and restructuring. The current system remains ripe for abuse and greed. Like a child who has been repeatedly scolded not to raid the cookie jar without parental (governmental) oversight the temptation will always be present. President Obama and Chairman Dodd, I implore you not to retreat at this sensitive time and to keep the fire of reform burning bright. A reoccurrence of what happened one year ago that revealed such widespread abuse cannot be allowed. Too much is at stake and wavering is too dangerous to even imagine.

Having the Right People Working for You in These Times

In Jim Collins' best-selling book, Good to Great, he states that "people are not your most important asset, the right people are." Stories abound in today's media about the abundance of talent and experience caught up in organizational job eliminations and corporate downsizing. There are thousands of top recommended executives, managers and line employees with accomplished track records available to make meaningful contributions and add value to company and/organization management teams yet hiring managers because of cost cutting or other reasons in this environment are unwilling to give these motivated individuals a chance. At the same time, one reads story after story or hears internal accounts about individuals in the public or private sectors who in some way have abused their management or team member positions with repeated incompetent workplace behavior invoking poor morale by forcing other dedicated team members to work harder to compensate for their (weaker) employee shortcomings. Is this fair to existing hard-working employees or to the existing talent pool of unemployed executives and managers who are extremely motivated to return to the workplace? I think not. Why not use these unprecedented economic times to reevaluate internal employee performance levels and purge existing staffs of weak or "tired" employees and replace them with proven talent from the ranks of today's unemployed? Granted there may be some circumstances due to contractual obligations where this may not be possible. But in study after study, chief executives cite "hiring and retaining quality staff" as their number one challenge. From a sound business perspective as well as achieving the ongoing goal of maintaining a healthy and productive work environment, why not employ this staff re-engineering strategy today? Notably, most companies and organizations already operate under "at will" personnel hiring policies. Chief executives need to employ the very best available personnel for the sake of their career paths. It is not the time to be weak, subjective or overly charitable. Strong leaders should and need to make these kinds of decisions on behalf of their companies or organizations.

What Has Happened to the Agenda of President Obama and the Democratic Party?

During the 2008 presidential campaign so many, including millions of young, first-time voters, were inspired by the words and vision of a youthful, brilliant and charismatic leader hailed as the newest torch bearer of the Democratic Party. Then candidate and now President Obama excited and inspired his audiences much the same way as another youthful, charismatic leader of my generation had, John F. Kennedy. He rallied the masses on issues of grave importance--much needed reform of the nation's health care system, a promise to wind down operations and bring troops home from Iraq, pledges to do more to help the middle class with their tax burdens, growing job losses, rising energy costs, increased foreclosures and victims of a greed-plagued, deregulated banking industry with new restrictive lending policies and near punitive credit card standards for even its most loyal and dedicated customers. The Obama crusade swept into office and carried huge majorities of Democrats into the U.S. House and Senate--a mandate for change from the Republican policies of the previous eight years that had drifted too far right on the political spectrum. What has happened to this momentum for change? Sadly, it appears we now have a Democratic Party not knowing what it wants to be and seemingly on the defensive from a vocal, fear-mongering Republican minority. True health care reform, inclusive of a public alternative, is in trouble thanks to a misinformed public and splintering party support, the Iraq timetable has been altered and troop levels continue to rise in Afghanistan with dangerous Vietnam-like parallels, large banks are announcing "profts" thanks to taxpayer-funded TARP funds, shrinking assets and more restrictive lending and a rash of new account and credit card fees, including huge interest rate bumps levied on customers with sparkling credit records and payment histories. A long ago proposed Home Affordable Refinance Program or HARP designed to assist distressed homeowners with needed loan modifications has been a dismal failure to date, and much needed financial system restructuring and reregulation has been stalled. Yes, I realize these are all huge problems but the American public voted in a new President and a new Democratic-majority Congress to effect change. Rather than carry forth with this much-needed change once bold iniatives have become watered down by a Democratic Party in disarray and a President seemingly caving into the old politics and special interests of the Washington establishment. Mr. President, we need your leadership and a renewed vigor evidenced so strikingly during the 2008 presidential campaign now more than ever to lead our elected representatives out of the current legislative morass. As you have stated so many times before, the status quo is not acceptable. We need change that is responsive and morally responsible. American's citizens, especially its overly burdened middle class, deserve no less.

Is the Recession Really Over?

Many economists have been reported recently to be in agreement that the Great Recession that began in December 2007 is over or will soon be over. They point to higher housing starts, auto sales, modest ticks upward in factory production, reductions in inventories and a stabilization in some metro areas in unemployment statistics. Like the Wall Street Journal reported recently I guess one's outlook depends on which America he/she is part of at this time. I guess I would classify myself as representative of the "other" America at this time--unemployed for over 2 1/2 years now despite Herculean efforts to find something here in the states and even abroad, savings depleted and retirement nest egg almost gone, a witness to obvious age discrimination in my search and scared to death of future prospects of possible total financial ruin. Anyone not in this position just can't relate to the pain, sadness, humiliation and frustration that this brings to an individual and his/her family. And just how can the statistics these economists are using portray any kind of a reliable trend when home sales are probably inflated by increased foreclosures and pressured bank sales and not the normal buyer/seller transactions, car sales inflated by the short-termed "Cash for Clunkers" program and unemployment numbers still rising in many areas and realistically not reflective of the huge numbers of long-term unemployed (like me) and underemployed where so many former "executive" types must take on jobs paying a fraction of what they had achieved before becoming unemployed. Although I want to be just as optimistic as the next person, from my side of the aisle I do not see the "shoots" and roses that the other America must see.