Wednesday, November 12, 2008

GETTING THE MONEY: The New New Deal

Like about seven million other Americans, every evening at eight o'clock I enjoy The O'Reilly Factor. When Bill's guests keep describing how President-elect Obama's New New Deal is going to rescue all us poor folk, O'Reilly, spoil sport that he is, keeps asking "but where's he going to get the money?" At that point conversation becomes confused. Even Bill can't stop the spin. I know where he is going to get the money. I remember the original New Deal. Been there done that!

When FDR saved all the poor folks of that day, he needed money. What to do? Well, it was sorta like what you do when you're hungry for watermellon when you didn't plant any mellons. Why, you simply go to the farmer's field who did plant mellons, being careful that he is not around with his shot gun, and pick a big one. Heck, the price is right. Take two. You take from those what has and, after having a slice or two for yourself, including the heart of the mellon, of course, you pass on whats left to others. What about the 8th commandment, Thou shall not steal"? Oh, I forgot, its the law, isn't it? It's okay for the govenment to steal, huh?

FDR did exactly that. He devalued the money. A dollar became worth only $0.51. Of course most folks liked this move because most folks in the 30s didn't have any money. Dad sure didn't. FDR then gave the money to the folks. After eating the heart out of the mellon, of course. Oh sure, there was the WPA, which does not stand for Works Project Act, it stands for We Piddle Around. Dad, along with all his cronies piddled around leaning on a shovel and rolling their own. At times they dug ditches alongside dirt country roads. Did he carefully save and invest this new found money? Nah! He consumed! He consumed lots of beer. If they gifted him with enough money, he did help out the farmers. It takes a lot of corn to make moonshine.

Oh, yes! Don't forget gold. Today its hard not to see that nauseous ad on buying gold. Be secure, put your money in gold. Forget that, FDR made gold illegal. All those squirrels, ants and bees who tried to be safe with gold, why, FDR simply took their gold away along with $0.49 of each dollar they had saved. Gotta save those grasshoppers, folks! They vote and there are a lot of them.

In an attempt to alert congress to certain change, fed chairman Allen Greenspan reminded congress and the American people that cycles had not been repealed. Look at nature's cycles. What we are about to cycle into, my friends, is not the cycle for ants, squirrels or honey bees. This is going to be the cycle of the grasshoppers.

And, if you don't get it just watch the media. They will explain how bad things are. Everyone's out of work. I can't believe people believe this media crap! National unemployment is 6%. During WWII it was 4%, people! In the great depression it was 25%, and those who were employed may have worked only a few days a month. Look at the 50 year chart of national unemployment. The peak was just before Ronald Regan took office. The last upturn was following 9-11. The peak trend is downward!

When Regan took office Carter had unemployment up to the 14% peak on the chart. It was 16% here in Ohio. I remember that well, I was unemployed along with tens of thousands in the tire industry when on the same day Firestone closed 10 plants and Goodyear closed eleven. My wife and I both lost our jobs in a 16% unemployment period. No bail out for the tire industry under Regan.

Julie and I simply joined the 84% of the people who were working. Yes, we had to use up some "squirreled away" savings. And Julie went from being a highly paid Techincal Engineer to handing out burgers and fries on a split shift at MacDonalds. As for me, I took a lot of study and preparation, with nil pay folks, and accepted a straight commission sales job. Strictly a no workee-no eatee proposition. There are no shortage of straight commission sales jobs today. Have you noted that the car dealers no longer have flocks of salesmen standing around? Hmmm!

Yes, but the stock market, the stock market! My 401K plan! Oh, woe is me! When Regan took over from the democratic president with a totally democratic congress the stock market was in the 600's. Today it is down to 8,000 from 14,000. Folks, if you liked those good American companies at $50 don't you just love them at $37.50? I do.

Yes, my wife's 401K plan reflects the market. It always does. As she nears retirement I was concerned that we would not get one more serious buying opportunity in the market before she retired. She has not only continued her 401K contributions but when the market started to falter around 12,000 I started to invest a couple hundred every month out of my retirement income. I could sure use that investment money as I plan my upcoming cross country bike trip but if I overlooked this investment opportunity I'd be a grasshopper. Hmmmmm again!


My concern is that congress will do something about all the "fat cats". Those making obscene profits. Like those squirrels who in the early 80's, when hands were being wrung over a 600 market, decided to take the risk and bury a few nuts. They bought Exxon at $10 a share. Boy, are they being repaid for taking that risk! Now, the grasshoppers cry foul and demand to share in the buried nuts. Congress is about to pass a law to restrict profit. They did it to the squirrels of the Alaskan Pipe Line during the OPEC oil cut off. Remember the gas lines of the 70's?

What about the money supply? Of course, the media will let you know the government needs to do something about the money supply. What money supply? They're actually giving it away! Auto makers are running hugh ads pleading with people to buy cars with every financial tool they can supply including no interest rates. You want to know about money supply? I can tell you. When Regan took over from Carter, then, there was a money shortage. Short term loan interest cost 21% and home loans were 18%. I know! I just lost my job and had kids in college. I had to take out a 21% loan, which I had the duece of a time paying off. But I did and never whined about it. The kids didn't even know and I surly didn't go whining to the public. I was too busy working! And, bye-the-bye, here is Ben Bernake reducing the fed fund rate to an unbelieveable 1%--if it gets any lower they will have to pay you for using money.

Is this all just sour grapes or maybe a little fear? Nope! I'm not sour, I'm meek, lowly and humble, sweet, gentle and kind! And the good Lord knows I'm not the least bit afraid. I'll get by. But this is getting long so I'll stop here. I won't mention new laws to further tax the working folks like FDR did. FICA, which allowed the U.S. government to go into direct competion with private enterprise, the insurance industry, and force working people to supposedly buy a retirement annuity. Social Security was simply a tax. The annuity part was a joke. The withholding was immediately spent by the government. It still is. Mr. Obama will probably call his tax HICA, with which to provide Health Insurance. After the government helps its self to the heart of the mellon they will help all the poor illegal immigrants and grasshoppers with whats left. Oops! Better not go there, the government monitors email and big brother is watching!

In the original New Deal FDR turned an 18 month recession into a ten year depression. What will Obama do in his New New Deal? Time will tell. Told my family to Hang onto their britches.

In 1948 at the age of 17 I took a solemn oath to defend the President of the United States against all enemies foreign and domestic. I firmly stand by my pledge. Gotta wait til 2012, Sarah darling.

Psalms 121: "I will lift mine eyes unto the hills from whence cometh my help; my help cometh from the Lord who maketh heaven and earth".

There I go clinging to my bible. I gave each of my sons a gun and sold the rest years ago so I can't cling to my guns. Yesterday I found a good buy on strawberries and today made 44 jars of strawberry jam. Perhaps I should rethink that gun decision. Wouldn't want those grasshoppers getting into this sweet store of "nuts", huh!

God Bless!

2 comments:

Phatmom said...

Walt,

I just quoted that same verse from Psalm 121 to a friend today, who was concerned about all that's going on. Great minds (and cousins) think alike! :) Also, I have her reading your blog now. I'll make sure she sees this entry! Great post! Not only do I have her reading this, I think I convinced her to join Ancestry.com. Maybe she'll be as blessed as I was to find a cousin.
God Bless,
Cheryl

bbmom said...

Great post - you could always put things into perspective. Love, Nan