Economic Recovery, History and the 4th of July.

It is sad when we hear the phrase, "History repeats itself, first as tragedy, second as farce." Karl Marx said this. The more famous saying we hear is, "Those who don't know history are doomed to repeat," Edmund Burke said this in the late 1700's.

I start this blog with these phrases to contemplate the issues that I am facing. This is one of the first times that I have started to think about my future for my family's sake. What will I being doing in 5 years and will it be good enough to provide for my family? Will I be able to put my son through college? Will I have enough to retire on.

Some of us have 401K accounts, and the majority of those are in mutual funds. We have suffered some huge losses and we have seen them come back some what during the past two years. Let us look at a number from the Wall Street:

Dow Avg. Unemployment

Jan. 2, 1930 244.2 8.7

Jan. 2, 1931 169.84

Jan. 2, 1932 74.62 23.6

Jan. 3, 1933 59.29

Jan. 2, 1934 100.34 21.7

Jan. 2, 1935 104.51

Jan. 2, 1940 151.43 14.6

Jan. 2, 1945 152.58 3.9

Jan. 3, 1950 198.89 5.3

Jan. 11, 1951 244.72

We have seen spikes in the stock market since the recession and most of us would like to recoup our 401K as quickly as possible. But if history is an indicator we have a long way to go. It took the economy of the 1930's and 19640's 21 years to recoup it's losses.

Let us look at some recent history that some of us grew up with, the Jimmy Carter era of 18% interest rates and a gas shortage that saw gas go from 25 cents a gallon to 50 cents, etc. What did the market look like in those years:

Jan. 3, 1972 889.3

Jan. 3, 1973 1043.8

Jan. 3, 1974 885.32

Jan. 3, 1975 635.54

Jan. 5, 1976 877.83

Jan. 5, 1977 978.06

Jan. 5, 1978 804.92

Jan. 5, 1979 830.73

Jan. 1980 891.41

Jan. 1981 932.92

Jan. 1982 884.36

Jan. 1983 1190.34

As we can see there are peaks and valleys in the 1970's through the early 1980's, but we need to know that we are going to need a good decade to recover from the economic turmoil. Unemployment was high as well. But one disadvantage we have is our national debt.

You may have seen headlines from a few days ago that we are approaching WWII debt levels. What does this mean for us? We have to tighten our belts and be prepared to sacrifice in order to get out of this mess.

I have begun the same approach. Tighten the belt and be prepared for the ups and downs of the coming decade.

1982 was the last time we saw unemployment at 9.7% and prior to that it was in the early 1940's. The only thing I recall from the early 70's was the high interest rates for mortgages and loans. Doubling your savings during those years was easy, rates went as high as 21%. It is a little harder to do today with savings accounts only earning 3% or less. We all tend to risk our money in the stock market in hopes of earning more. The stock market is a gamble, and when you gamble you take the risks associated.

I think the economic turn of 2010 to 2019 will hinge on real estate. Why real estate? More people have mortgages then in the our history. The amount of secured debt hinges on our country's economic growth, the fiscal responsibility that our government has to us the people, and the responsibility of the people to pay their debts.

Finally, I decided to really read the Declaration of Independence for the first time since high school. It is amazing how much of what is said is totally applicable to our times. Here are a few phrases that stand out and draw your own conclusions:

That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed,

That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government,

For imposing Taxes on us without our Consent:

For taking away our Charters, abolishing our most valuable Laws and altering fundamentally the Forms of our Governments:

For suspending our own Legislatures, and declaring themselves invested with power to legislate for us in all cases whatsoever.

He has excited domestic insurrections amongst us, (he being King George)

God Bless America and each and everyone of us.

Conservatives Need to Act

It is time for the conservative movement to ACT instead of reacting. Our country's government has spun out of control because of the Democratic and Republican parties. Each party is more concerned about it's position and role within the government rather then with “We the people“.

President Obama was looked at as change during his campaign and eventual election. I believe President Obama would have had a difficult time being elected if the Republicans had really mounted a serious effort to win the election. The McCain/Palin ballot was in all essence a rollover move by the Republicans, but with this "conservative" ballot the Republicans lost more power within the Congress due to a poor image and message.

But once again the Republican Party and the conservatives are not making themselves heard in a constructive and forward thinking position. The lack of leadership within the conservative movement in the USA is a large hindrance towards dictating the direction the country and forthcoming campaign must move in. The message is still reacting to the issues rather then resolving the issues with a message and and proposed solutions.

The Republicans have no one to blame but themselves. Rather then take the penny pinching formula the Republican Congress put forth under President Clinton, they became an irresponsible government that emulated the Democratic Party in spending. This resulted in the negative image of President GW Bush along with the nebulous concept of a war on terrorism. These two issues led to the eventual downfall of the Republicans.

The Democrats have always controlled the entitlement portion of the population, and it is the swing in mood of the tax-paying base that has determined which party rules and when they rule. Should we be surprised by the waffling of President Obama? Absolutely not! His campaign was one that only reacted to the current issues of the country, i.e. the war on terrorism, spending and eventually the financial collapse of the banking sector. He only promised change and an openness that would embrace the suffering voters of the USA. He touch the voters who wanted a change. But as in every election, the winning candidate makes promise after promise and reneges on promise after promise. President Obama never proposed detailed plans, but he touch on the desires of the masses in such a generalized manner that he garnered more and more support. His greatest skill is his ability to read a teleprompter, and it makes him seem charismatic.

Today we are dictated to by a government controlled by the Democrats: Obama, Reid and Pelosi. This was never the intent of the founders of our country and constitution, it was to be a government that listened to the population. The frustration felt by the citizens of the USA is being heard, but it is a backlash against the incumbents and the jam it down our throats process. This backlash is not enough.

The Republicans or the conservatives need to find a dynamic spokesman and formulate a message. There is currently no person in the public eye willing to take the current Government to task with a message that is going to bring hope and unify the conservatives into taking control during the mid-term elections and eventually the Presidency. What is the message? We the people have had to tighten our belts and become a nation of savers rather then credit whores. The message needs to focus on the this and the following:

1. The economy is still the biggest issue.
2. The out of control debt.
3. Affordable health care for the entire population.
4. Strengthening social security and medicare with tax reform.
5. Tax reform that involves fiscal responsibility.
6. Revise the amount and recipients of foreign aid.

Change starts with each and everyone of us.