Posted: August 5th, 2011 | Author: Joe | Filed under: Economy | Tags: Economy, Layoffs, UnEmployment | No Comments »
According to the most recent report from consultants Challenger, Gray & Christmas, Inc., the numbers of planned layoffs being announced by employers last month surged.
Planned layoffs: June vs. July, 2011
That’s 59.4% higher than the same time last year:
Planned layoffs July, 2010 vs. July, 2011
Job cuts at Merck, Borders, Cisco Systems, Lockheed Martin and Boston Scientific accounted for 57% of the July total. July marks the first month in the last seven when the private sector shed more jobs than the government sector did.
Pharma and retail make up the largest sectors.
What makes this latest report so ominous is that the majority of these cuts come from industries that have experienced low levels of layoffs compared to other industries.
All of this leads Challanger to quip:
“A casual observer certainly might conclude that the wheels just fell off the recovery wagon.”
Source
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Posted: August 3rd, 2011 | Author: Joe | Filed under: Economy | Tags: Debt, Economy, Recession, Wealth | 1 Comment »
The Great Recession is the most racist recession in generations!
At least that’s the implication in the CNN Money story titled: Recession worsens racial wealth gap
It all revolves around the “wealth gap.” There’s been much chatter about the gap between rich and poor since 2008, and the writers of this CNNMoney story (and others) seem to think the gap is due to race.
Can a recession be racist? Is the wealth gap really race based?
Here’s the breakdown of the effects of the recession along “race lines”…
The wealth gap (2009).
The story relies on data from a 2009 study by the Pew Research Center, which found that:
“[T]he median wealth of white households was 20 times that of black households and 18 times that of Hispanic households.”
The study defines household wealth as:
“the sum of a family’s assets minus the sum of its debts.”
Assets include:
- homes
- cars
- savings accounts
- financial investments
Debts include:
I’m not sure what they group into “other things”. Presumably other debt?
Regardless, the study found that while the Great Recession hammered just about everyone’s wealth, the gap between white households and black or Hispanic households is the widest it has been since 1984, when the government began publishing such data by ethnicity.
The AP puts it differently:
“The recession and uneven recovery have erased decades of minority gains, leaving whites on average with 20 times the net worth of blacks and 18 times that of Hispanics, according to an analysis of new Census data.”
The wealth of blacks vs. whites.
The Pew study uses the data from the Census Bureau to highlight the disproportionate effect of the housing market on blacks and Hispanics.
The study acknowledges that:
“The wealth of white households in America has always been greater than black and Hispanic households. But the recession widened the gap significantly”
Why would the recession widen the gap significantly? That implies that those at the bottom fell farther or those at the top rose greater or a combination of both?
Remember that talk above about an “uneven recovery”?
Why it isn’t a race thing.
Dig a little deep and you start to see inklings that even the AP and CNN know that this is not a race-based issue:
“the wealth of white households has probably benefited from the rise in stock prices over the last few years, since a much higher share of whites own stocks.”
If this were really due to race, then we’d be seeing ads from ETrade, Scott Trade, Fidelity, etc.. stating things like:
“$7 online trades*”
* Whites only
or using phrases like
“Minorities need not apply”
Since this is clearly not happening, I submit a better use of the Pew and media’s time and energy would be to conduct a study analyzing the wealth gap in terms of general education and financial education.
Outright racial discrimination is simply not legal, and not present in the majority of the U.S. any longer. Certainly not to the extent that would be necessary to “keep minorities down” in the wealth gap on purpose.
The real problem with these kinds of reports and studies is that it allows people to remain distracted by issues that are no longer real (i.e. racial discrimination) at the expense of ignore real causes of the problem like education and general financial savvy.
I may be going out on a limb here, but I think that most blacks don’t invest in the stock market because they simply don’t hear family members or community leaders talking about assets and investing and building wealth. They get no exposure to that. Instead, they hear about racial discrimination and how white people want to keep them down, all while they can’t do it alone and need a government program to do it for them.
Nobody ever got wealthy living on public assistance.
Further evidence
The study goes on to make the following points:
- The main asset of minorities is their home
- older whites are more likely to have 401(k) retirement accounts or other stock holdings.
If your biggest asset was your home, then you’re definitely at the lower end of the wealth scale after the historic housing bubble burst. But is that a racial thing?
The AP article points to the “uneven recovery” as the culprit to the wealth gap being so large this time around:
“What’s pushing the wealth of whites is the rebound in the stock market and corporate savings, while younger Hispanics and African-Americans who bought homes in the last decade… are seeing big declines”
Also according to the study, Hispanics are more likely to be employed in the construction industry and more likely to live and buy homes in states such as California, Florida, Nevada and Arizona – each at the forefront of the real estate bubble.
Again, is that a race thing? Is there a law stipulating that Hispanics can only go into construction?
The media and government policy wonks are now lamenting that this pushes our country further into “what the Kerner Commission characterized as ‘two societies, separate and unequal,’”
Focusing on race does nothing but perpetuate this. Instead, we should focus on introducing concepts of personal finance to more minorities. Educate them instead of indoctrinate them into believing that they need a government handout to survive.
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Posted: April 14th, 2011 | Author: Joe | Filed under: Economy | Tags: Constitution, Economy, Hillsdale College, Liberty, Townhall, Webcast | No Comments »
If you’re an American who is unhappy with economic conditions today, concerned about our loss of personal liberty and think the country is on the wrong track, I urge you to consider taking a look at this free webcast on the importance of the constitution as it relates to the pressing concerns of today.
Believe it or not, many Americans today think the constitution was simply a document that was created to help start the United States of America, but has since lost relevance. This belief could not be more wrong. The Constitution is as relevant to America today as it was when it was first codified by the fledgling U. S..
This Saturday, April 16, Hillsdale College is hosting a free townhall discussion on the role of the constitution in securing economic liberty.
Speakers include Indiana U.S. Representative Mike Pence, Associate Professor of History Paul Moreno, and the President of Hillsdale College, Larry P. Arnn.
Topics include:
- “Choosing Liberty” : Today citizens must choose whether they will live as citizens, or subjects.
- “How Our Economic Liberty Has Been Diminished” : How the Founding Fathers enshrined the principals of economic liberty and property rights, and how progressives have fought to undue those rights for over a hundred years.
- “How Our Economic Liberty Can Be Restored” : A restoration of constitutional principles cannot happen without citizen understanding and vigilant defense of the principles of the Declaration of Independence and Constitution.
Registration is free and the webcast starts at 10:00 AM (EDT).
Register here.
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Posted: March 28th, 2011 | Author: Joe | Filed under: Debt, Economy | Tags: Debt, Economy, Housing, Lifestyle | No Comments »
Pop quiz: What’s more important, your home or your family?
I’m not going to pretend that this is one of those trick questions designed to make you consider your priorities in life and there’s no right or wrong answer.
There is definitely a right and wrong answer here.
Check out this AP article about a Nevada family’s everyday struggles amplified by Poor Choices.
The AP tries to make the case that Tera Berbank and John Clark are in the dire financial straights they’re in because the state of Nevada is nearing an economic depression , but that’s only half of the story.
The economic state of Nevada makes the couple’s situation harder, but it is only part of the problem. The rest of their problem is poor priorities and bad choices.
Priorities
For Burbank, surviving means ensuring her children’s success and protecting the one place they could ever call home.
“It’s our everything,” said Burbank, 34, of the family dwelling. “They can take the car and we will eat cat or dog food. Come what may I’ll keep that house.”
There’s a case of priorities that are way out of line. If you’re OK with your kids eating cat food just so you can keep your house, you need to seriously re-evaluate your situation.
She may think she’s “ensuring her children’s success” but her children’s performance in school tells a different story:
The oldest daughter, 14-year-old Brooke, earned D’s and F’s at school. Amalea’s guidance counselor asked about problems at home.
It looks like their current path isn’t working. In the article, she talks about the impact of the family financial situation on her marriage, and it isn’t pretty. She wonders how long it will be before they get a divorce.
Bad choices
Her poor choices started when she was young – she dropped out of school at 14. Fast forward to 2009, and she and her now husband were married and bought a new home. The home they bought wasn’t ridiculously expensive. It was about 2x their combined annual income, which is well within the usually recommended norm. It obviously turned out to be a bad time to buy, and especially in Nevada. But what made this even more risky was the fact that both she and her husband worked in construction.
I don’t mean to come down too hard on her because she made some bad choice early in life, Everybody makes mistakes. But when I read stories like this I always put myself in that position. I ask, “What would I do if I woke up one day in this life?”
In short, what I’d do in this situation is everything I could to ensure the survival of my family – as a family.
I’d say “to hell with the house”, find out where there were jobs and what kind of jobs they were – and move there. I wouldn’t care if it was in another state. I wouldn’t care if I had to lose everything and start over – as long as my family was together and I was doing what I could to provide for them. But that’s just me.
Instead, Tera Berbank seems focused on doing everything she can to hold onto her house, which she will likely lose along with her family.
If this is truly representative of America today, then we are in dire straights indeed.
Let this be a wake up call.
Let this be a reminder that an education is as important as location when it comes to finding and keeping a job.
Let this be the motivation we need to put a financial plan in place.
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