Punching Stupid and Evil in the Face Since 1986!

"We are on strike, we the men of the mind. We are on strike against self-immolation. We are on strike against the creed of unearned rewards and unrewarded duties."-John Galt

Tuesday, December 30, 2008

Money is not the problem.

As I look back at 2008, it is clear the financial issues of today are a direct result of the excess and poor decisions of yesterday. Sadly, few people want to admit no matter how many bailouts, no matter how many "public works" programs and "stimulus" packages are put in to play, it is of little consequence-we are tanking economically. This is not a doom-and-gloom statement, it is a simple fact. Year after year of disgusting, ridiculous excess has finally caught up with us. The government must stop interfering in the natural order of failure-it is silly and quite presumptuous; similar to proclaiming one could "stop" or "prevent" a tornado. That would be an impossible task, just like stopping this economic catastrophe is impossible. Up to this point the only two things our government has actually accomplished is to extend the pain of this collapse and to spend (and print) money we do not have-which will continue to lower the value of our money and astronomically drive up our debt; ultimately having little to zero effect on the final outcome. While this whole thing has not yet played out to a conclusion-it will. As people cut back-either through force (no credit for the undeserving and devastation for the stupid) or by choice (for Christmas we spent less than half of what we spent last year and paid for everything in cash-neither of those choices was driven by a lack of funds)retailers and manufactures will cut back or fail-as they should. If I run my business poorly, I will fail. Simple.

People in power have convinced themselves that some kind of "float" will get these companies through to the other side and everything will then be OK. The fatal flaw of this thinking is: the other side is not going to look like this side. People are cutting back, companies MUST follow suit if they are to survive into the next decade-or even the next year. We can longer support a Walgreen's or Best Buy on every corner. We can no longer fund hundreds of thousands of new, un-sold cars sitting around in storage waiting to be sold to buyers that do not exist. As producers and consumers we have lived lives of delicious gluttony and loose credit; never believing the final bill would come due. Some say the excessive, super-sonic speed of rising fuel costs were the catalyst that broke the camel's back. Maybe. It really doesn't matter the final proverbial straw, the real issue is that as a country we couldn't withstand some tough times. Everyone is stretched so thin that one thing is all it took to send most over the edge. It is a truly sad state. High gas prices were difficult to endure, but they did not send me into ruin. In driving around 300 miles in an average week, you might imagine $4/gallon gas was a strain-but…..I got through. People no longer save for emergencies; people no longer have a plan for job loss or a realistic savings cushion in case of financial strain; people have spent years living far beyond their means, racking up home, auto and credit card debt they could never pay off. Most folks got too far extended and had too much confidence that nothing would ever change. Fat chance. It seemed life was just one big credit party and now the party is over. The day of economic reckoning is here. The piper must be paid-whether today or tomorrow is of no matter-bailouts, stimulus packages, and public works are not going to salve our wounds.

The only thing that is going to right this mess is a little pain for everyone. We are going to have to tighten our belts and ride out the storm. We'll get through, but it is going to be tough. No one ever said life was easy.