northeast boomers
by Dean Hughson
April 8 ,2009
Northeast will
survive bad economy
All of the national newspapers have many articles currently about the economic bailout and the hopeful idea that giving money to banks, car manufacturers and tax cuts will take our economy back to where it once was.
In reality, perhaps the question we should be asking is whether where our economy was at was such a good place to be. Banks, with government financing programs, were giving loans to people who were speculating that the property would gain more value.
In fact, many of the loans were given to people who couldn’t afford the houses and were gambling that the value of the house would go up and they would then sell it and make money from the action.
Car manufacturers were continuing to make standard cars, even in the face of increasing fuel costs, and cars that gave longer mileage were considered experimental and most weren’t even for sale yet.
We consumers were told that the safest place to put your money was in stocks, treasury securities and banks, and now we find out that even these investments were risky and not necessarily the safest place to put our money. Eventually the stock prices came down along with the banks and investment firms, and that is where we are today. Our gambles weren’t what we thought they were going to be. Even owning a house isn’t resulting in large profits, as many thought it would.
Other articles are now popping up about some rich investors who have lost billions to a New York and a Texas investment company that apparently was taking more money in constantly to keep giving some payments to the earlier investors and thus doing a Ponzi scheme. Although it is a sad story, the reality is that you won’t see any Northeast Kansas City investors in that group because they only took money from multi-millionaires and billionaires. I bet that we’ll see a call for “rescuing” these investors before we’ll see a call to help those who lost their life savings in stocks.
So the logical question is where did your 40 percent loss go in stocks in your IRAs or investment funds? The reality is that stocks are an emotionally driven priced item; people buy stocks thinking they are worth more and they’ll go up. It is not a sure investment, and you have no security. In fact, in theory, the stocks could be worth less than zero, and you and the other investors could owe money, but it never works that way. It is not unlike gambling on the riverboats, except the length of time of the gamble may be a lot longer.
It is times like this that make people question what they have been taught over the years. But sometimes history also helps us understand the present, and that saves us making the mistake again. During the Depression, I am told, people relied on what they could control, like gardens, raising animals for their own consumption and bartering what they had in surplus with neighbors for what they needed. They didn’t trust the banks or stocks or the government. I hope that we don’t get there, but if we do, Northeast is in as good a shape as any place to survive it.
The logical way to survive this is to cut back to minimalist lifestyles and live on less — sort of the Northeast lifestyle anyway. The economy will come back to some different setting, and life goes on.
2009 Archives:
February How do I go about getting bailed out?
January Hoping for solution to drug problems in New Year
2008 Archives:
December Dreams take flight on Independence Avenue
October Bad moods are an option — Getting old is not & Writing vs. Talking
September An old lion roars once again
July Finding Local Love
March The Northeast Test
February Going full circle
2007 Archives:
November Presidential Primary –Northeast Style
April A 'Viking' Encounter Miles Away
2006 Archives:
December Wheelchair adventures
November Turkey Disasters
October The Viking Ship is Still Rowing & Kansas City is a Baseball Town
August Government Cheese
June Marching with the Immigrants
May I See Ghost Mechanics
February Flying
January The Power of My Mind
Dean Hughson is an eggman residing in Spirit Lake Iowa and sometimes in Kansas City with his wife, Yoly. Dean travels worldwide and maintains a Web site at www.eggman.cc. He is a proud member of the NE Class of 1969 Tribe. Dean can be reached via e-mail. To read more about his memories of Northeast High School visit Go here.
