Wednesday, January 28, 2009

What a week... and it is only Wednesday

It has been a pretty wild week and there are still a couple more days to go. In my most recent post, I talked about the profits my employer made last year, despite the tough economic conditions seen for the last half of 2008. To be frank, I am busier now at work than I was just a few short months ago, but I think that I am busier because I am able to do so much more as I have learned about the skills needed to do my job. Over the course of the past few days the following companies have announced major layoffs:

Home Depot
Sprint Nextel
Texas Instruments

On Monday, 26 January, the companies listed above and a host of others announced
layoffs totaling over 70,000 jobs. That is a lot of people. People who have a car payment or a mortgage or medical bills or some other life expense. This economic downturn appears to be much deeper than most economists expected. And for the record, I use the term "economist" loosely. In my professional experience, the economists I have met are people who wanted to be mathematics majors in college but could not do the math required to be a mathematics major. Most of the economist I see as a talking head on one one of a dozen different news channels can usually tell why some company failed or why some industry go to the sorry state it is in, but can rarely, if ever, provide a path to prosperity for the aforementioned company or industry.

I have been told on more than one occasion that I am a "glass half full kind of person." I suppose that is true. My mother said to my spouse once when she was asked what kind of child I was, "Well, he was always a happy baby." I am confident that despite all of the sour economic news and dire predictions by economists, the economy of the United States will rebound. It might take a year, or even 18 months, but it will come back. Through the history of the Republic, there have been recessions, runs on banks, credit crunches and a Great Depression that lasted more than a decade. I would like to think that we as a nation have learned from the mistakes of the past and actions will be taken to get the country moving again.

The new administration is touting an economic stimulus package that will cost somewhere between $800M and $1T dollars. That is a lot of cash and I fear that the next few generations might be left paying that bill. However, inaction at this moment in time could be even more dangerous than doing something. President Hoover was criticized (again after the fact by economists) for not taking action quickly enough after Black Tuesday, 29 October, 1929. President Hoover was voted out of office in 1932 and President Roosevelt took immediate actions to try to get the U.S. economy moving. Now, I am not making comparisons between 1932 and 2009, but the point I want to make is any action that will improve the perception of the public that this economic trouble will pass as all other have is a good thing.

I will continue to be optimistic about where the country will be in a year or two. I am old enough to remember the inflation and interest rates of the late 1970s, and I certainly remember the boon years of the 1990s. Call me hopelessly optimistic, but I am what I am. The U.S. economy will be back and it will be back with a vengeance.

1 comment:

Big Johnny said...

I hate happy people :^p

And Pfizer can eat my shorts !! Worst stock on the NYSE