The Economy, Stupid
- posted by Elmo on 2001-04-18 00:00:00
You know, at the risk of sounding like a socialist, I have to make this
statement: I really hate money. It is the ultimate tool of oppression.
Collectively and individually, we are as dependent on it as we are on
oxygen, and those who control it control every aspect of our lives. I think
we would be a lot better off as a society without it. I'm sick of worrying
about it, I'm tired of hearing people fight about it (it breaks up more
marriages than infidelity). I'm sick of living from paycheck to paycheck.
I'm sick of having to scrounge around every month just to pay my bills, and
I'm sick of having large chunks of it stolen from me by the only legalized
extortion operation in the US--the IRS.
No, you're not imagining things--this isn't another forward, it is a genuine
original Elmo rant--my first in about 3 months. I should take this time to
apologize for slacking with the rant for so long, but I have at least been
spending my time productively--or so I thought. For the past couple of
months my family and I have been in the process of negotiating the buyout of
a highly profitable software business. If the deal had gone through, my
money problems would have been pretty much solved. I don't want to mention
the name of the business, but most of you from the Western Kentucky /
Tennessee area would probably know the name of it if I told you. It is a
powerhouse retailer of discount software and a staple at computer shows
throughout the region. The only reason the owner is selling is because of
his health. My mom, who has made a living keeping books since before I was
alive, and I got to go all through his books and we were highly impressed.
I can truthfully say that if that deal had gone through and we were able to
maintain anywhere near the level of business that this man had maintained by
himself for the past six years, I would have been well on the way to my goal
of being a millionaire by the time I am thirty. (No I am not greedy, I am
just sick of worrying about money and if I were a millionaire I wouldn't
have to worry about it anymore.) The price was admittedly kind of
high--$200 grand, but when you consider that it has consistently grossed
over a million dollars for three years running, with modest growth each
year, it would not have taken that long to repay a loan for that amount.
Besides, my parents had borrowed well over that amount during the course of
their lives, paid it all back, have incredible credit without blemish, and
were co-signing with me. And the owner was even willing to self-finance
$90,000 of the amount he wanted, and we could raise $20,000 in cash and
equity, so that only left $90,000 that we had to borrow. We would have been
getting that much back in inventory alone with the business, which could
have served as hard collateral.
But we went to two different banks and the Small Business Administration and
no one was willing to give us the loan. At one bank, the one my parents
have done business with for the past 25 years, we thought surely we would
get it. The loan officer was really nice and genuinely interested and bent
over backwards to help us. Everything proceded as though we were a shoe-in
for the loan, until at the last minute we got a call saying that the board
had decided to turn us down because we "didn't have any sales experience",
and that their decision was final. Hello, what planet are they on? I've
been running my own computer sales and service business for going on a year
now! Before that I worked for two different computer stores, one of which I
was a co-owner of, and I sold computers and software there. I have direct
experience selling software packages, as well as building my own. Besides,
there isn't much selling ability required to sell at those shows--you just
run the register and ring people up. The owner said that it required three
people running three registers at every show to keep up with the customer
flow. Doesn't sound like he had much time to do any selling, much less that
he needed to. The fact is that the elite control who gets rich and who stay
poor, and I'm not a member of the country club and I don't play golf with
their board members on the weekend. I'm not one of the good ole boys, and
someone on the board may know someone that he or she would like to see rake
in the money with a gold-mine business like that. Perhaps.
But I think there is more to this than class discrimination. I believe that
this is just one more tell-tale sign that our economy is in big trouble, and
the banks aren't taking any chances with new businesses--even to the point
of shying away from financing new owners taking over profitable existing
businesses. So I guess it's time to take off the rose-colored glasses of
media spin and take a realistic open-eyed look at our economy. Investors
have lost billions in the stock crashes over the past few months. Our new
President has taken some criticism for repeatedly calling it a recession,
but you'd have to be blind and living in a cave not to see that is what we
are in. He just wants to make sure everyone knows that it was here before
he took over--that it was Clinton's baby, not his--because his father had
taken a pollyannaish attitude in the face of an economic slowdown in the
early 90's and took big a pounding at the polls because of it. But the
truth is that neither George HW Bush nor Clinton had much to do with that
earlier recession or the so-called boom of the late 90's. It was mostly
Alan Greenspan and the Federal Reserve--an ironic name considering it is not
federal (any more than Federal Express is) and there are no reserves. But I
digress; more so than the President of the United States, the chair of the
Fed is perhaps the most powerful single man on earth.
Anyway, stock prices only fell because they were inflated to insane levels
to begin with. It is true that Greenspan hiked interest rates way too high
and then didn't lower nearly enough or soon enough ward off the collapse.
But it was only a matter of time anyway. Most stocks were valued at several
hundred times projected corporate earnings, with reckless buying patterns
not seen since just before the crash of 1929! And then everybody acts
surprised when the bubble popped?! They say you can't build a house on
quicksand, but the reality is that you can--just don't act surprised when
you pull in the driveway one day and all you have left is a few inches of
chimney.
But stock prices are just one symptom of the larger economic conditions that
have been building throughout most of the Clinton ("It's the Economy,
Stupid") Administration. Accounting for inflation, people's net earnings
have decreased sharply, and our standard of living has plummeted. In the
mad dash to follow the modern-day pied piper's tune of globalism, we were
been promised that American businesses would rake in the money in increased
exports. The reality is that our national sovereignty has been compromised,
unprecedented floods of imports have made the "made in America" logo more
rare than spotted owls, and our biggest export by far has been jobs. Before
NAFTA, GATT, and all those other so-called "free trade" treaties that
President Clinton and his Republican accomplices barreled through Congress
without even bothering to read the details of, there were quite a few
countries out there with whom we actually had trade surpluses--but no more.
Ross Perot's infamous "sucking sound" may not have been as loud as
predicted, due in large part to mainstream media complacency and the muzzle
of "political correctness", but the result has been the same.
So we've lost our manufacturing base, and the Internet hasn't lived up to
it's promises--mostly because the e-commerce revolution was 99.9% hype,
buzzwords and marketing clichés to begin with. In terms of real buying
power, our salaries have declined sharply, and our cost of living has
skyrocketed. Our savings rate is the lowest since the Great Depression, and
we have trillions in credit card debt. Back in the day, the vast majority
of a given community's needs were met by "mom and pop" businesses. But
these days they have all but disappeared, to have been replaced by faceless
mega-corporations. I wish I had a dollar for every time my current bank has
changed it's name (a.k.a. been bought out by a bigger bank) in the past 10
years. And word is that next year they are going to do it YET again. The
so-called Clinton boom was pure plastic. Retail seemed to be going well
because most people were living beyond their means, by charging their credit
cards up to the hilt. But now that the clock has struck midnight and our
magical economy has turned back into a pumpkin, Cinderalla is going back to
her rags because she can't pretend to be a princess anymore. In other
words, now that times are hard people have stopped spending like there is no
tomorrow, but it is already too late. They are up to their eyeballs in debt
and many will never get out, now that Congress has taken away the safety net
of bankrupcy. Sorry Cinderella, but this time the glass slipper has
disappeared as well.
And just to add insult to injury, we were gouged by outrageous natural gas
and heating costs this winter, and now we are about to get gouged by
skyrocketing gasoline prices again. They were already at $1.50 a gallon
last weekend, and they are expected to reach $2.00 a gallon by summer. This
isn't just OPEC ripping us a new one folks, our domestic oil cartels are
just as much to blame. Notice how when OPEC lowered their prices our gas
prices hardly went down a bit, but as soon as OPEC hikes their prices just a
little bit our gas goes through the roof. They've got us by the
you-know-whats, but only because we allow them to. The so-called energy
crisis is a sham, just as the one in the 70's was a sham. We've had the
technology for decades to end our dependence on fossilized fossil fuel
technology. But the J.R. Ewing's of the world have us in their back pocket,
and will keep gouging us until we demand they stop.
In my last forward, Joe Farrah said it was time for a revolution. I
couldn't agree more. It's time to stop suppressing technologies that could
not only be keep the environment clean but also save us trillions of
dollars. It's time to stop taxing people to death. It's time for the
government to do the same thing the rest of us have to do when money gets
tight--cut our spending. The nightly news is once again ripe with tales of
corporations are downsizing on a massive scale and layoffs are coming on
faster than hayfever season--now it's time for the government to also do
some downsizing. Someone is bound to point out that President Clinton once
said in a State of the Union address that "the age of big government is
over"--and I got a good laugh out of it back when he said it too. The truth
is that if you rule out all those cuts in our military (the stuff we
actually need), government grew by leaps and bounds under Clinton. Guess
that's another one that depends on what the definition of "is" is. I'd say
that was the second most comical thing the man ever said--the first being
when he promised his would be "the most ethical administration in history".
On the other hand, President Bush's tax cut proposal is a good baby step in
the right direction, but it falls waaaay short of the mark. Did you know
that his proposed 2001 budget, unbelievably criticized by certain liberals
in Congress for "draconian cuts", is still over TWO TRILLION DOLLARS. Think
about that... if Regis Philbin were to give away a million dollars to a
different person every night, including weekends and holidays, it would take
him over 2700 YEARS to give away 2 trillion dollars!! In one dollar bills,
you could wallpaper the entire North American continent with that several
times over. In fact, you could probably wallpaper the entire globe! We
need a 1.6 trillion tax cut out of THIS YEAR's BUDGET, not over ten years.
But the liberal tear-fest over those lost pork chops has only just begun.
Only in Washington would cutting the rate of growth be considered a "cut",
and a lowering taxes be considered a "spending increase". Orwellian
newspeak has reached new heights.
Would you like to hear a classic example of the utter audacity of
government? I knew you would. It seems that in my home town of
Hopkinsville, Kentucky, the poor city employees just aren't making enough
money to make ends meet, so the city council wants to give them a raise.
Fair enough, I suppose--we could all use a raise in these difficult economic
times. Especially considering that Hopkinsvillians pay among the highest
tax rates in the state, and probably the nation. Six percent state sales
tax, double property tax (city and county), 1.5% payroll tax on top of state
and federal income tax, and most outrageous of all, the cost of a business
license. It shot up a couple of years ago from an almost-reasonable $50 a
year to $300 a year, plus 2% of your annual profits. But despite this and
innumerable other license and registration fees and hidden taxes in our
telephone bills, water bills, electric bills, and other necessities, there
just isn't enough money in the budget to give those starving city workers a
raise. So they want to--get this--increase the payroll tax on everyone else
so that city employees can have a raise. Is that arrogance or what? We
don't have the luxury of giving ourselves a raise whenever we need more
money, why should we allow our elected representatives a blank check with
our money? Kind of makes me seriously contemplate running for local office.
Can you say "ten year moratorium on ANY new tax increases"? I knew you
could.
Elmo
Click here to return to the previous page.
|
 |
