By: John Krikorian
Each day headlines are changing and the challenge to finding a just solution for America seems to elude us, be it for our economy, the energy situation and the now not so talked about illegal immigrant problem. It seems that the war in Iraq has for now been put on the back burner. If only we could develop a truly bi-partisan approach, a sound consensus and get away from protecting individual political turf and do what is best for our country. As I sat down to write my thoughts about the financial crisis that has put all of us in turmoil, along with that of California with the late budget, and the impact to our various cities. I thought it best to express views and comments from others, in the time of our upcoming Presidential election, that are addressing the tight credit market, revenue shortfall caused by the bursting of the housing bubble and the surge in defaults and foreclosures, along with our economy drifting into a possible recession. It is of interest to note the lost of jobs in the private sector, in contrast to the growth of employment in government jobs, from Washington, D.C, to Sacramento to our individuals cities. While industry tightens up and reduces cost, our government continues to grow, with payrolls increasing at a rapid pace.
Here are quoted comments by our Presidential candidates in response to our Nation’s Financial Turmoil: • ”In Washington today-and I’m afraid on Wall Street – greed is rewarded, excess is rewarded, and corruption, or certainly a failure to carry out our responsibility, is rewarded. As president of the United States, people are going to be held accountable in my administration.” – Sen John McCain. • “This is a final verdict on eight years of failed economic policies – promoted bya theory that basically says that we can shred regulations and consumer protections and give more and more to the most, and somehow prosperity will trickle down.” – Sen. Barack Obama.
Economic Challenges- Housing Key to Bailout Success:
• Congress Did the Right Thing: “Small business owners, whether or not they use credit to run or expand their own businesses, know that access to credit and a fully functioning financial market are important to them and to their customers, suppliers and vendors”, noted Toddd Stottlemyer, president and CEO of the National Federation of Independent Business
• Governor Arnold Schwarzenegger’s Radio California Report: “Americans have been hit with a lot of tough economic news recently but we got a big boost this week (Oct 3) when Congress approved the $700 billion rescue plan.
A similar plan was defeated earlier but it was explained to the people as a bailout of Wall Street, when really it was about helping ordinary Americans.
This plan was always designed to help people like the restaurant owner that I met who had trouble getting a loan to meet his payroll. Or the small business owner who could not borrow funds to replace old equipment or keep up with inventory. Or parents who needed to borrow money for their children’s college education.
This rescue plan affects ordinary, everyday people on Main Street, not Wall Street and that’s why it was absolutely essential that it got approved. But as welcome as this news was, California is still not out of the woods.
The legislation the President signed will unfreeze the credit markets but no one can say how quickly
I have also called for a meeting next week with our state legislative leaders to make sure we are all on the same page about how we move California forward in these difficult times”.
(Editor: Do we know what our individual cities are doing to meet this challenge, besides increasing taxes?”)
• 159,000 Jobs Lost in September, the Worst Month in Five Years: The American economy lost 159,000 jobs in September, the worst month of retrenchment in five years, the government reported on Friday, amplifying fears that an already painful downturn had entered a more severe stage that could persist well into next year.
Employment has diminished for nine consecutive months, eliminating 760,000 jobs, according to the Labor Department’s report. And that does not count the traumatic events of recent weeks, as a string of Wall Street institutions collapsed, prompting the $700 billion emergency rescue package approved by Congress on Friday.
“It’s a dismal report, and the worst thing about it is that it does not reflect the recent seizure that we’ve seen in the credit markets,” said Michael T. Darda, chief economist at MKM Partners, a research and trading firm in Greenwich, Conn. “There’s really nothing good about this report at all. We’ve lost jobs in nearly every area of the economy, and this is going to get worse before it gets better because the credit markets have deteriorated basically on a daily basis for the last few weeks.”
Housing prices continue to fall, eroding household wealth just as millions suffer the weight of unmanageable debt. The deteriorating job market has taken paychecks out of the economy, reinforcing a predilection for thrift that has cut sales from car showrooms to hair salons. By Peter S. Goodman, NY. Times