Lend A Hand

“Those who do not study history are doomed to repeat it.” – George Santayana

Ever since I began to notice things in America going to hell in a hand basket, I have been devouring U.S. history books as fast as possible, in particular the era of The Great Depression. I have seen some frightening similarities. Despite some deliberate differences, I believe our country may be heading for the worst time both economically and socially, that it has ever seen.

Main factors leading up to the Great Depression are considered to be the greatly unequal distribution of wealth (built up during the roaring 20s and the Coolidge Prosperity), and extensive speculation on the part of investors in the stock market.

Big Business has taken a very powerful hold of our nation through the ineffeciency of our government. CEO are making approximately 400% more than the average worker while their stock holders continue to lose money. The Oil Companies are recording record profits and, due to speculators and panic over natural disaster like hurricanes, our gas prices continue to rise to a level that the average working person can not afford. Many people who couldn’t really afford to on their own merit invested in real estate during the boom from 1999-2004. Others were lured into home ownership but easy to obtain mortgages, many of which were eventually foreclosed upon.

Companies have been outsourcing our manufacturing jobs slowly for years but thanks to the prevalence of computers across the globe, even our skills jobs are being lost to other countries. Factories can’t afford to make things in this country because the competition with other companies who have cheap foreign labor in other nations can sell their finished products in this country for so cheap. Apparently none of these outsourcing monsters have stopped to think what will happen when fewer and fewer Americans have jobs to earn money to buy those consumer goods made by people willing and able to work for pennies an hour.

When I watch the unemployment rate rise, the education level of our youth fall, the food and energy shortages (and water is soon to follow), the health care cost fly off the charts so that people can’t afford to get sick or take a day out of work (something quite popular during the days of the Great Depression), you can see why I believe we are heading into rough waters – in fact, the roughest waters possible.

Financial “experts” are saying that we aren’t in an “official recession” due to GDP growth or the tiny bump of a rise in consumer sales. I say these experts are obviously not living in the real world where people are choosing between food and medication. Where we were once living from paycheck to paycheck and not are living with the knowledge that every month something will have to go unpaid. We are calling our mortgage companies, utilities companies and medical professionals to set up payment plans because we can’t afford to pay the whole bill at once. We are baking our own bread and using baking soda and vinegar to clean rather than expensive brand-name (or even cheaper store-brand) cleaning products.

We are looking for second jobs, part-time jobs, freelance jobs, work-from-home jobs, and side jobs just to make ends meet. We are going without so we can get through to next month. Meanwhile, the jobs are leaving, the taxes are rising, the health care costs are impossible, and food and gas are running a race for which can squash us first.

My advice to you: Study history because I believe we are about to be doomed.

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War On The Middle Class by Lou Dobbs of CNN fame is one of the most comprehensive books on the problems facing the working and middle class people of the United States.

The topics discussed include economy, illegal immigration, the mainstream media spin on current news, government involvement with Big Business, and how Big Business is working hard to push the middle class into extinction.

If you enjoy the independent-minded spin that Lou Dobbs puts on his broadcating, you will love this book. It is honest, frank and fresh with an entire chapter dedicated to action steps the average citizen can take to fight against the decay of America.

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It’s nearly impossible to turn around today without hearing a report or reading an article on the state of the economy. Most of these reports are negative, frightening, and downright depressing.

While I’ll admit that the worsening economy is squeezing almost everyone in some way or another, some of us are struggling more than others. So what are some of the economic problems faced by my family and those in my local area?

1. Gas costs – I don’t think there’s a person living in our country today that isn’t complaining about gas prices. Actually prices have fallen a bit in my area and are under $4.00 since early this spring. It scary to watch the lines at the gas stations that are offering the lowest prices, if only by a few pennies. It is frightening deja vu of the seventies when gas shortages led to long lines at gas stations everywhere. At the beginning of the month I went to fill my mini-van (before you say anything, realize that I drive less than 100 miles a month and rarely go through a tank of gas in one month) and when I hit $75, the gas pump automatically shut off and a display flashed saying “Fuel Limit”. So there we have it – Gasoline Rationing. Nobody I spoke to knew that this was in effect and I guess it would only effect someone like me who fills up a 21 gallon tank once a month. Still, I find this a scary thing to face.
2. Utility Costs – In Rhode Island, the PUC just approved a 21.7 percent increase in the price of electricity and an 8 percent increase in the cost of natural gas. The water and sewer company is fighting for an increase of their own, further squeezing the lifeblood out of RI citizens. People on a fixed budget, like the elderly and those on state assistance, have little hope of paying these price hikes without turning to the already financially strapped nonprofits for help. And the electric and natural gas companies continue to boast high profits despite their insistence that they are in financial trouble too. Just another case of the “little people” getting stepped on because we have become dependant on silly necessities like light, heat and water.
3. Food Costs – In the decades of food shopping that I have done, I have never seen prices rise so sharply and so rapidly. A loaf of bread was around a dollar at the beginning of  the year and is now up 30 cents at least. Eggs, milk (all dairy products in fact), seafood, meats, and fresh produce seem to be the hardest hit by the increase in food prices. Grains also are more expensive and harder to come by. All of these increases have reasons behind them, mostly driven by natural disasters. However, corn prices have gone up due the increased demand from companies making ethanol. As American Families, we are going to have to start examining the way we buy food and how much we are willing to pay for the “extras” that we always throw into the cart. As the price of staple foods go up, cookies and chocolate syrup are going to get left by the wayside. And what do you think that’s going to do for the economy?
4. The Mortgage Crisis – This is a touchy subject no matter who you talk to. Some say the lenders were evil and knew the consequences of the loans they were giving to people who obviously couldn’t afford them. Others say that the people should have done their homework and known what they were getting into. After all, just because someone is willing to give you a bad deal, doesn’t mean you have to take it. I’m somewhere in the middle. My husband and I took out an 80/20 loan in order to afford to get our first house. We refinanced the following year for a 5-year interest only loan with a “teaser” rate. This was not the smartest thing we could have done and we should have stuck it out with the 80/20 loan so it really is our own fault in our case. In three months our mortgage is set to go up $400 a month and we are working to make sure that we increase our income to cover that difference. Although we are going to try to refinance, we don’t have our hopes up and we don’t expect the government or the American people to bail us out. That said, I believe other people were not as informed as we were and made bad decisions based on what brokers, agents, and lenders were telling them. We were told to refinance in a year and to keep refinancing until we had something we “could afford”. The person who told us this knew that the market was going to be in a downslide soon and we would be left with no equity within a very short amount of time. I can only imagine how many other people he led to believe that the horrible mortgage they were signing was only a “temporary arrangement”. So before you judge these people to harshly, realize that many of them were first-time homeowners who were ignorant but not malicious and are now in real trouble that will not only affect them but will crush property values and weaken the nation’s economy even further. With that in mind, you should be more than willing to help out and support any measures on the part of the government to help these people out.

With all of that on our plates, we are also dealing with job losses to outsourcing, a failing education system, illegal immigration and a outrageously poor health care system. Is there a turnaround in our near future? What do you think?

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