By Craig P. Dixon, southcoast247.com correspondent . Social Commentary 147
February 2nd, 2008
I was talking with a friend the other day. The topic of "recession" came up. After a few comments back and forth, I asked if he even knew recession's definition.
"No," he said. Which proves a very valuable point – At least 50 percent of the people in the US don't know the definition of "recession". So, why fear it?
The answer is simple: People fear what they don't know. They hear words spoken in solemn, somber tones by the mouths on the news, and they just know it's something bad.
So: What's in the word? When business activity peaks, starts to fall, and finally bottoms out, or the Gross Domestic Product declines over two consecutive quarters, we're in recession. Given this definition, nobody may declare a recession until at least six months after it started. And there are times when we're in a recession and nobody notices.
Ladies and gentlemen: I think it's obvious. It's not a matter of if or when or who says so. We're in economic recession. And there's a good chance we'll be recession for a long time coming.
I bet you're questioning my economic credentials. And you'd be right to. I know nothing about the economy on a large scale. Wall Street, with the over-enthusiastic, arm waving, shouting floor traders, seems like a meeting of pseudo-religious fanatics to me. Just who the hell do I think I am, declaring economic recession?
I'll tell you who I am. I'm the man. With my meagerly informed mind I know more about recessions and basic economics than the average American. I'm a straight arrow. I don't gamble, and that's what the stock market is: A gamble. I possess something that allows me to see through everyday pedestrian bullshit – Common sense. It's a lack of common sense in the average American and the overweening greed of lenders that had a major role getting us into this economic mess in the first place.
Was I the only one that thought it ridiculous when someone paid 400 grand for a house that went for 225 only five years before? When people signed variable rate mortgage contracts on those houses, with no money down, was I the only one saying, "Jeez, people are crazy." When banks were signing people to these contracts though they knew damned well these individuals couldn't afford their payments, was I the only one saying, "Jeez, banks are crazy. Something's not right here." Was I?
For the past five years or so, I've been saying that the insane housing market couldn't go on forever. A correction was due. That correction we now have. And the freefalling housing market has brought down the rest of the market along with it.
Then there are the morons that just had to have the Plasma screens, the surround sound systems, the Playstation 3's, and bought them on credit.
Ahh, credit. Other people's money. Best part is, you rack up credit bills and more card companies come to you with offers of 15 grand credit and 0 percent APR for a year. Tempting… especially if you're some stupid shmuck making 10 g's a year. You could have the A/V system and suped-up Corolla of your dreams today. And pay it off… someday.
But hey: This amazing debt's not all bad. Congress is going to kick everyone 600 bucks. And it's only going to cost the country 150 BILLION dollars. Cash we don't have, of course. We'll just push ourselves further in debt by borrowing from the Saudis and the Chinese.
Wonder why Congress would be so keen on this stimulus package? It's pretty much a given that it won't do much in the grand scheme. After all, what's 600 bucks?
I have a theory. It is an election year. Since this Congress hasn't done much of anything (other than produce "symbolic" gestures), and neither party wants to seem like they're against a stimulus package, a payoff to their constituents just might buy them reelection. People have ADD. A nice check in June will still be on their minds come November.
Personally, I think Congress shouldn't do a damned thing. The American people must be forced to live without the unnecessary Blu-Ray DVDs and chrome exhaust tips. Forced to make tough financial choices and actually use the old brain for a change. It was greed and a lack of common sense that got us into this mess. Do we reward ignorance, incompetence, and morally criminal behavior? What precedent does this weak bailout of a stimulus package send? What will it do to ebb recession?
Not a whole lot. Average Joe Citizen will declare the 600 bucks an economic windfall and make a down payment on a 62-inch LCD at Best Buy. A few intelligent folks will use the cash to pay bills. Far fewer will save it. Admit it, people. We're a nation of debtors. We wouldn't feel right if we weren't in debt.
How am I going to spend my rebate? On crystal meth and hookers. Hey, drug dealers and prostitutes need to eat, too, and they're not included in this stimulus package. I'm just giving back.
Same goes for you, Lou.
I was talking with a friend the other day. The topic of "recession" came up. After a few comments back and forth, I asked if he even knew recession's definition.
