I agree that this is a time to be cautious. The big problem right now is the world instability and huge budget drain caused by the war in Iraq, and that's true whether you agree or disagree with the U.S. being there.

Of course, with stocks, you do need to buy low and sell high. The tendency of small investors is to buy when things are good and then get shallacked by selling when things are bad. So, this could be a time to pick out some stocks that you think will go up when the economy improves. But which stocks are those? That's the $64,000 question.

Taking the advice of investment gurus and financial experts is a recipe for financial ruin, as many people found out the hard way in recent years. The best advice I've ever seen for picking stocks is to buy stock in companies you know about and believe in, and which are in a position to grow. Trying to figure out what's going to be the next Microsoft or Yahoo (in its high-flying years) is probably more risky than taking your money to Vegas.

A subscription to The Wall Street Journal is the best way I know of to learn about what makes companies tick and figure out which ones might be good bets in our changing economy. It provides an unbelievable amount of good information about companies. If you don't want to take the time to read up on companies and segments of the economy, then you really don't belong in the stock market.

I think many of us are in the stock market anyway, with defined-contribution plans (IRAs, 401(k)s, 403(b)s, etc.). In that case, you're looking at mutual funds, money markets, or GICs.

I agree that economic lulls are good times to invest for better times. I have another two or three decades in the work force, and I'm hopeful it will be better by then. :0

It would be nice to have a crystal ball tell me, though, whether we're near the bottom or whether things are going to get a lot worse.

I have my retirement savings in a variety of mutual funds (American Funds and Oppenheimer). I was willing to follow a pretty aggressive policy, knowing I will be a working for another 20+ years (at least!), but I'm now wondering if it isn't time to begin a transition to a something more "indexed"... I don't know.

We have an emergency fund, and I have liquid savings, too. No debt.

I'm just feeling uncomfortable with the present gridlock and the seeming unwillingness to discuss ENTITLEMENTS, even though everyone KNOWS they have to be discussed. And I'm feeling anxious. Nice to know I'm not alone in my worries, but scarey that even with a very thoughtful and frugal lifestyle I'm worried about the future economic security of a country I love so much.

Not only is your U.S. Dollar down in relation to the Euro, but in relation to most of the other currencies in the world, as well.

About a year ago, our Canadian Dollar would buy about US 65 cents, but now it will buy up around 85 cents. So, had you bought Canadian dollars back then and changed them back to U.S. dollars now - you'd have made about 30% on your investment. Capital gain - which may enjoy some tax advantage (it does, here).

Not only that - much of your debt is in foreign hands,

Which means that interest paid on it goes offshore.

A number of countries' people are becoming leery of holding U.S. debt, which makes it harder to convince them to pick up new debt offerings, or to continue to carry current debt.

If there is substantial reluctance, the issuers may find it essential that they offer incentives, such as higher interest rates, denominating their debt in foreign currencies, so as to reduce the buyer's risk of erosion of value of the debt - but which means that, should the U.S. Dollar value slip further, a much larger amount of U.S. Dollars would be needed in order to pay off the debt in future.

When you expand military and other spending substantially ...

... and offer a tax cut to many taxpeyers (especially corporations, who can threaten to build their factories/carry on their business elsewhere) ...

you can expect problems down the road.

Our damn fool governments (Federal and Provincial) have cut services heavily, then offered tax cuts as well.

If an individual goes out and buys more stuff ...

... then gets a substantial cut in pay ...

... there's trouble ahead.

So with governments.

Fifty years ago, when I was helping a few of thousands of refugees get back on their feet after the terrible Korean War, a retired doctor who was helping combat TB there, which was a big problem, said that inflation was governemnt theft.

I disagreed with him then (aged in the mid-20s).

Not now, after fifty more years of living.

Good wishes for planning your life to avoid some major financial pitfalls.

ole joyful

I'm now wondering if it isn't time to begin a transition to a something more "indexed"... I don't know.

They say it's hard to consistently beat a low-expense index fund with any other kind of sector fund or growth/G&I/etc. fund. It's also easier to keep track of (as an investor). But you can diversify your indexes to include Dow Jones, NASDAQ, foreign investments, etc. and it's probably smart to do so.

It's hard to imagine that just six years ago we had eliminated the budget deficit and were reducing the national debt. Now, the deficit is ballooning and national debt is increasing at an alarming rate. What could possibly have happened?

What could possibly have happened?

Whose set of excuses would you like? :-p

Chalk it up to the perennial optimism of politicians, who believe they don't have to collect the money they spend (or give away).

Even if you get rid of the deficit - that's just this year's spending.

There's still that huge debt that was accumulated in earlier years.

On which we must pay interest - even at the low current rates.

A fairly large percentage of each tax dollar of federal (provincial/state, as well) income must go to pay that interest.

Which means that it's money that can't be used for current needs.

That is - it was living high on the hog that we did in earlier years - and our grandkids will have to pay off the debt.

That is - we stole from our grandkids.

Didn't we?

I'm waiting with bated breath for your comments.

ole joyful

That is - we stole from our grandkids.

Didn't we?

I'm waiting with bated breath for your comments.

You won't get any arguments from me....

Tax Free Munis. Thank The Powers that Be if you are living in a state that has many. I Do! My CPA told me to get rid of all those nasty stocks that were paying me dividends so I wouldn't have any taxes to pay. OK, so I'm reluctant, but I did get rid of a lot of them.

Hi - again - Gina in FL,

We don't got that kind of investment venicles in CA (Canada, that is - not Calif.).

When you invest your money to earn interest, usually there are two rats that eat your cheese.

The first rat, the income tax people, want to talk to you about (I say up here) every dollar of your earnings for that year.

When you invest in your Muni's, you've put that rat to sleep.

Many people who invest to earn interst like the guarantee that the borrowing agency usually gives: that they'll return every dollar at the end of the term. There's another gurantee, as well, that they never mention: they won't return one dollar more, either, apart from the interest (rent money).

As you know, $10,000. now won't buy what it would 10 years ago.

So - if you want to maintain the purchasing power of your asset, you must add some of the dollars of the interest to the base asset, in order to keep it able to buy as much next year as it did this year. And you must do that every year (except those in which there is no inflation - when did you last see one of them?)

The inflation rat eats part of the value of every dollar of your asset annually.

And, don't forget - the rats eat first.

Examine how the wealthiest people made their money - usually in stocks or real estate.

Usually, over the long term, a carefully chosen group of stocks will produce a better rate of return than money invested to earn interest, if one considers both the surrent income and the growth in value over the years.

Suppose, at age 15, you'd invested $1.00 and earned 5% return on it.

For 50 years.

How much would that dollar have grown to in those 50 years?

The value would be $11.00 and change.

Suppose, though, you'd been able to earn 10% - any idea what your value would have been at age 65?

The value after earning 10% throughout would have become $117.00 and change.

Suppose the value of your stock droped by half - you'd still be laughing. Seldom does the market as a whole drop by more than 30% - and usually it grows during the next two or three years at higher than usual rate.

If you choose to own equity mutual funds, and their average rate of growth is about the long term market average of 7 - 8%, if the mutual fund manager takes 1.5% (in Canada usually more than 2%), that manager has taken about 20% of the growth.

So - it does pay you to learn how money works and buy your stocks yourself.

If you want to buy a piece of the various aspects of the market as a whole, but Exchange Traded Funds, or i-units.

Thirty seven years ago I bought a stock for $16.00+ per share, but it has split two for one, two or three times, meaning that my effective cost has become either $2.00+ or $4.00+ per share.

A few years ago each share was worth $56.00 - and a couple of years after $24.00. Then it went to $30., $40., $50., $60. and, a few weeks ago, $70.00 per share.

Am I kicking? Not one bit.

Not only that - when I first bought them, they paid about 6 cents or a dime dividend per share, annually.

A few years ago it paid 80 cents, then 90 cents, then a Dollar, later $1.20, later $1.32, then $1.48, and more later.

I think that it pays me $2.40 per share each year, now.

Am I kicking about that? Not vry likely.

A wiose investor never puts a major portion of his/her asset into the more volatile shares of small companies, etc.

It isn't a good idea to get into the ones that have been flying high, either - like the computer-related things in recent years.

Why did we want to buy the computer stuff - after the fiasco of Y2K - when many users had bought new stuff just before the year 2000?

Shouldn't we have known that they wouldn't be buying again for a while?

Learning how money works - an interesting hobby (THAT PAYS WELL!).

Good wishes for wise investing.

joyful guy

P.S. If you'd been able to earn 15% on that Dollar for the fifty years - it would have grown to $1,080. or so. A lot more than the $11.00 plus change at 5%.

The smart money managers like to have you lend your money to them - and they make more on it than you do.

jg

W has decided to "fix" social security but hasn't come up a way to pay for it yet. Basically, us young folk will be taking our money out of the fund to invest it in some private account. Which leaves a large deficit in the money needed to take care of current and near future retirees. W isn't going to raise taxes and he isn't going to change the amounts or age at which todays' retirees can collect. I guess we're going to just shove that future debt onto the future generations as well. I'm so glad I don't have to explain this future mess to my children- we don't have any.

We've been living more excessively than was justified - and our grandkids will have to pick up the tab.

Stealing from our grandkids, who'll have to deal with less prosperous jobs, wasn't/isn't fair.

My kids hit 43 and 40 last month.

No grandkids.

ole joyful

How long do you think the present voter demographic will keep the "privatization" ploy at bay? For now, it "ain't a foregone" conclusion.

At 46, my congressmen and senators KNOW EXACTLY HOW I FEEL ABOUT IT.

Means testing, increased payroll taxes, and benefit cutting... . Nobody wants to hear it, but that's where the answers lie. And a lot of people who think SS is a god-given right are going to feel the sting INITIALLY. But all the "goodie-goodies" who did the "ant thing" (saving for the winter) will have their "tab" added to our's. AND, for those of us pushin' 50, "privatization" will arrive too late or will be too risky... .

My opinion.

The whole Social Security crisis scare they're promulgating right now is nothing more than a ploy to get privatization pushed through. Back in the 1980s Alan Greenspan recommended an increase in Social Security taxes, and that increase did pass Congress and is still in effect. Politically it was easy to pass that tax, because Social Security taxes are in essence a regressive tax, hitting the poor and middle-class harder than the rich.

So we've paid our money, and now they're saying, nope, you still may not get your benefits, or they may be drastically reduced, because we've spent that Social Security surplus on other stuff. Much of the national debt, in fact, is owed to the Social Security system. But that's not a Social Security problem, that's a reckless spending problem. The remedy comes in fiscal responsibility overall, not in sacrificing Social Security.

Other countries, and U.S. states, that have tried privatization have not found that it works all that well. If people make unfortunate choices with where they allocate their retirement savings (not always their fault, btw), they still wind up needing assistance when they're retired. So, there is still going to be a need for some sort of "basic" government-provided system.

And then you have the specter of major bankruptcies of corporations who operate these funds. Surely there would need to be some sort of government insurance to make sure that people don't lose all their money and have no retirement.

So what is in essence being proposed is a system where corporations who operate these plans could get rich off of them, having billions of dollars of money funneled into their coffers -- money that people were required by law to have deducted from their paychecks -- yet after the executives have gotten rich off of it and milked the system dry, they can turn around and stick taxpayers with the bill a second time, in the form of making them pay benefits to millions of retirees who would then have nothing else.

So what is in essence being proposed is a system where corporations who operate these plans could get rich off of them

Those are the only folks who will profit from "privatization." What a shame that most people know so little about it (and want to know even less) that they are clamoring for their own fleecing ....

It's my opinion that a lot of people simply crave one a "one size, fits all" solution to what has been a festering issue for nearly 30 years now. All they want to hear is an ANSWER; they're too uninformed to realize the solution will involve EVERY thing they don't want to hear. And that each and every one of us is going to "take a hit".

By and large, people do not understand that SS was designed to save a family from utter poverty. NEVER was it ever intended to provide the lion's share of retirement money. Workers have conveniently forgotten the necessity of saving on THEIR OWN. We must begin instilling this in every child in our publically funded school systems; personal responsibility!

Only in recent years has the age at which people may collect "full" beneits been raised (I have to be 70 1/2, my husband 67)... but the retirement age has yet to be raised. At the institution of the program, the retirement age was 2-3 years beyond the average age of death in this country. We have to raise the retirement age. And I'm SO tired of so many elderly's belief that they're withdrawing "their" money... failing to understand that it's THIS generation's payroll taxes that fund their checks; funding that has been enabled with ever increasing payroll tax rates! In clear point of fact, those presently collecting a SS check withdrew every dime they paid into the system within 18 mos. of receiving their first check. These simple realities seem to be "forgotten" and they must be addressed in the school systems, and with frank, open discussions of the appalling condition of the program.

Means testing... a lot of people don't need those checks; let's call it what it is... a program designed to keep people's noses above water. For those who foolishly failed to save anything the rest of us must pick up the slack, and SS has become another welfare program. Those who don't truly need it, with have to forego it, like it or not. And it ISN'T fair.

As the wave of baby-boomers prepare to break on the shore we have to GET REAL, GET HONEST, AND DEAL WITH IT NOW. Privatization only raises the stakes more, although the younger members of the work force see it as liberating. Naive... who will "bail them out" when their poor choices in the stock market wipe out all they "saved" or gambled? our elected officials MUST be prepared to frankly discuss it... .

our elected officials MUST be prepared to frankly discuss it

I agree with you completely. But I suspect that, having dodged the question for years and years, our elected representatives will not deal with these tough questions anytime soon. :-(

Here's one younger (41 years old) member of the work force who doesn't see privatization as liberating... I think it'll be a disaster, unless you work in the financial services industry on commission. Most average people just aren't lucky or informed enough to gamble stocks successfully. Look at all of those Enron folks who had the majority of their retirement savings invested in ONE stock... that of the company they worked for! Didn't they ever read anything about diversifying their assets? I think if privatization happens you'll see heartbreaking mistakes like that over and over again.

Some time after the Enron debacle, I made a couple of suggestions about lessons that most of us could learn from it, to apply in our own area of interest.

One was that, if we are buying stock in our company, we shift at least some of that investment into other issues after it becomes released. The Enron employees thought that their company was going great guns.

It sure ain't fun to not only lose your job - but find that your investments are nearly worthless, as well.

My second suggestion was that people check where their private pension assets were controlled. Often, especially in the case of defined benefit systems, they are managed by the employer, or at least accessible by them.

Which often means that they invest substantial amounts in years when they make a major profit and less or none in less profitable years.

I suggested that employees make a substantial effort to have their pension plan carried by a third party, and set up so that the employer couldn't raid it.

The Enron employees found as well that their so-called pension saving plan was flat broke, as well.

In the discussion, people got off on the tangent of blaming Enron, or discussing other companies' malfeasance, etc. but there was not a lot of discussion about the topic as I had presented it.

I think that those suggestions are still valid.

Good wishes for a good (but not outlandishly rich) current income, a decent pension credit - and good health, and good friends, to boot.

Also, the hope for avoidance of quarrelling with relatives, if I may - what a shame that families carry on old fights when they get together for what should be a happy holiday, wedding, funeral, etc.

joyful guy

"I suggested that employees make a substantial effort to have their pension plan carried by a third party, and set up so that the employer couldn't raid it."

Joyful, do you speak of company pension or the typical employee 401k type plans? Or both?

When I left my last employer (worked there 18 years), I easily moved over my 401k plan to that of my new employer. But when I tried to retrieve my pension (401a), they said no. Many companies allow ex-employees to rollover their pension fund to their new employer's 401k plan.

My concern is that when I'm ready to retire, my old company will turn out like an Enron and lose my pension plans. This company has gone thru several mergers in the past 10 years. And they're not doing too good right now. I would feel much safer and my pension fund would fare off much better if I were in the driver's seat.

Zofie,

I referred to a private pension plan, funded by the employer.

Many are defined benefit plans, where the employer guarantees that the former employee when s/he becomes a pensioner will receive a specified amount regularly, subsequent to retirement.

In those circumstances, as I mentioned, employers may add a substantial amount to the invested assets in years when they make a good profit, or little or nothing when they have a poor year. Regardless - they have a contractual obligation to pay the benefits to which they agreed. They usually manage the invested funds.

In such circumstances, a number of companies in trouble have raided the pension fund, so that it ends up with little or no funds.

That's why I feel that it's best to have pensiuon plans to which employers contribute to be carried by outside agencies at arm's length from the employer.

In that case, if the company goes broke, the pension survives intact, so that the retired people are not left without income, and current employees have pension credits available, to be drawn on after they retire.

I like that scenario better.

joyful guy

I should have said that, being a Canadian, I have no useful information about your 401 type plans.

That info will have to come from some of the well-informed people on here. Sorry.

Hope you get the issue straightened out to your satisfaction.

joyful guy

maybe a little off topic, but I was wondering if the president's state of the union address (last night) gave anyone warm fuzzies about the economy, oil prices, healthcare, jobs, war in iraq, other?

I didn't hear it.

I'm sort of glad.

"Nuclear" stuff has been around since 1945 - and wouldn't it have been more humane to have dropped the first bomb on holy Mount Fuji, then warned people not to go up there, but to fly over to look at the damage.

How come your current president can't even pronounce that word correctly?

How far did he go in school?

(And, by the way, speaking of wars - which ones has he been involved in directly?)

Sorry to be rather rude - but he carries the fate of the world on his fingertips that control the triggers.

Back to the topic of this thread - if you want to see the U.S. (and Canada, of course) in another generation - look at South America today.

A few rich, who control all the assets - and a heck of a lot of poor.

If you're planning on building one of those big mansions that many middle class folks seem to feel justified in having these days - better design it for easy subdivision so you can have a couple of other families move into separate quarters when you can't afford the utility bills any more.

P.S. Buy some Canadian Oil Sands stock - there's more oil there than in Saudi Arabia, though it's a bit hard to process, but as prices rise, it becomes economically feasible.

Your stock analysts are mad as hatters that the Chinese are subsidizing a pipeline to the coast ...

... but your companies own a lot of the petroleum companies in Calgary, now.

There's a difference???

Have a great week, everyone - don't take yourselves too seriously.

ole joyful

My opinion of Dubya is unchanged.

He is an idiot, surrounded by more of the same.

Wanna know what I REALLY think now?

I heard a story on NPR today or yesterday about an interesting new book, "The Walmart Effect: How the World's Most Powerful Company Really Works and How it is Transforming the American Economy." Sam Walton discovered that people will go out of their way to get a few dozen cents off the usual price for goods they use everyday. Walmart has continuously lowered prices by demanding lowered prices from their suppliers. The suppliers have lowered the cost of making things by using lower quality raw materials and making things less sturdily than in the "old" days. People expect to pay $50 for a DVD player, but they get one that breaks down easily. Since folks will buy this cheap stuff from Walmart, no other stores can get folks to buy better quality goods at a higher price. Walmart sets the prices and levels of quality for the goods sold in our economy. As the jobs go overseas, the quality declines, we buy more stuff, we feel richer because we have more stuff, then we lose good-paying jobs and can't even afford the cheap stuff, eventually.

It is a huge machine slowly grinding to a halt.

My sister's 49 year-old friend is a machinist. She went to school and did very well, considering that she learned the trade in her forties. She also bakes and decorates cakes for a living, keeps her own poultry, and probably still cans some veggies. She has no health insurance because she can't afford the premiums offered by her small, family-owned factory employer. She has a modest, older home in the country and can't pay the mortgage and health insurance, too. She has always driven older cars, wears simple jeans and shirts, and has no vices. Her whole financial world will tumble when she becomes ill.

I wish that the politicians in Washington could live her life for just a month.

When did paying a living wage and taking care of each other become a financial sin? Henry Ford knew that if he paid his workers well, they'd become his customers. Do we have to wait for all of the farflung economies on the Earth to be exploited, revolt, and demand to be treated humanely before we can go back to negotiating for what we need from the capitalists who employ us? I am not going to live that long, and I also feel lucky to not have children who will suffer through what is to come. It won't be pretty and it will bring out the worst in all of us before it gets better.

I forgot to post the link!

No, jasper no warm fuzzies here. Nothing "W" has said should give anyone a good feeling. NancyLouise

When did paying a living wage and taking care of each other become a financial sin?

I don't know as it has become a sin as much as a downgraded priority. While I think the "perfect storm" metaphor frequently is overused, I think it fits here. Many old, seemingly-minor decisions and events have given rise to the current situation.

America has become a consumerist society. People are defined increasingly by how much they own. So folks try to look successful or look like they belong by buying "stuff" -- even if they have to go heavily into debt to do it, eliminating their ability to go without a job because there are no savings to fall back on and encouraging them to accept pretty much whatever employers choose to do. These folks also are a ready market for anyone who can make desired goods cheaper -- even if that means buying it at a big-box store or from a company that has moved its manufacturing outside the U.S.

The rise of automated production and the persistence of cheap petroleum for shipping has encouraged the growth of production in countries where the cost of living is much lower than in the U.S. U.S. manufacturers cannot compete on labor costs, so their solution largely has been to force what savings they can by pitting employees against each other for jobs (despite the non-level playing field) and eliminating human-powered jobs whenever possible. We even do this to ourselves, as we pump our own fuel, use ATMs instead of bank tellers, and check out and bag our own groceries.

A medical system in which no cost is too high to spend to sustain or improve life, a more litigious society, unchecked profit-taking by medical providers, and less-active lifestyles fueled by cheap heavily-processed foods have ballooned medical costs. As a result, many companies find medical insurance costs quite high. So they cheapen the coverage or get rid of it altogether.

And the tenor of discussion in this country has changed over the last quarter-century. It moved from "how much can we do?" to "how much can we cut?" Somehow many (if not most) people have accepted the notion that not being a tax-paying, job-holding citizen is a "choice" and that people making a different choice will solve the problem. While there certainly are people who "game" the system (one reason why the conversation began in the first place), we have made many decisions that return a few bucks to taxpayers' pockets but generate longer-term problems from folks who should be institutionalized but aren't, kids who have few educational or productive legal social opportunities, and poor people who could be on their way if only they could get a leg up in the form of classes in English, a working vehicle, daycare, etc.

I wish people would think more about how they spend their energy and money and what it says about who they really are. It certainly would change things in this country.

excellent responses. I had the same feeling how the quality of are lives in the US is declining. Continually exchanging good wage paying jobs for cheap goods will bite us all eventually. A couple years back, I was a victim of offshoring of jobs and was layedoff. I did find work, but that trend still continues today. Good paying jobs are lost by the thousands. The fall of the american auto industry is another example, i.e Ford and GM.
I don't see myself starting a small business or becoming self employeed as a viable alternative (as the president speeches always seem to mention). We need life substanable jobs, healthcare, education, retirement benefits and a host of other things in THIS country. This is not a sin, and it should be a priority.

Thats my rant for today. I feel better now. Thanks for listening.
-jasper

Again, I'm relieved to read so many thoughtful replies from people I wouldn't recognize on the street (except nancylouise who probably lives quite nearby!).

I work in a skilled trade. I worked in a factory until it became impossible for it to compete with off shore manufacturers. I watched my skilled (but marginally educated) co-workers settle for jobs that paid less, offered no benefit package and extracted a work week in opposition to the school week of their kids. I was lucky. Well educated, technically very skilled, I was able to "shift gears" and move into related fields that required either a "quick study" or a enough grounding in the basics to limit the pool of applicants. For me, it was my excellent education and assiduous attention to BUILDING my skill base every year that saved my bacon! Part of it was luck, but more of it was my own ability to read the "tea leaves" and accept the reality that my trade was going down the toilet pretty fast, so I needed to "broaden my skills". Not every American worker is so savvy/lucky. Nor do many have an great education to serve as a springboard to a NEW career.

I'm so sick of the "small business" is the FUTURE mantra. Oh please... . I work for a small business; it can't pay the price of health insurance, but it does offer me a nice retirement savings plan (I max it out yearly!). The helpmeet's employer is able to pay healthcare for him... he gobbles it up in lieu of pay "raises". But for how long?

I would LOVE to have Dubya/Condy show up for one of MY weeks... up at 4:30, take care of my elderly mother (don't forget the urostomy and the ever increasing dementia), go to work for 8-10 hrs. (this is taxing, physical work that also requires sharp arithemetic skills), hurry home to spend time with same elderly mother (but do the errands on the way), clean the kitchen, the house, mown the law, etc., etc.... I don't think those spoiled fools would survive 3 days. I really mean that. They have NO CLUE, whatsoever.

Until WE, en masse, begin the same mantra, they will never "hear" it.

sigh

For me, it was my excellent education and assiduous attention to BUILDING my skill base every year that saved my bacon! Part of it was luck, but more of it was my own ability to read the "tea leaves" and accept the reality that my trade was going down the toilet pretty fast, so I needed to "broaden my skills". Not every American worker is so savvy/lucky.

Not every American worker wants to think about it. Back in the '80s, when Eastern Air Lines' baggage handlers went on strike, I found it hard to muster sympathy for people who thought that they could be forever paid today's equivalent of $20 an hour for what is essentially unskilled (or lightly-skilled) labor. Not knocking it if you can get it. But in a work environment in which similarly-skilled folks were making much less than $10 an hour, you had to think it could not go on forever and that it was smart to have a "Plan B".

I'm in IT, a field which is being nibbled at by outsourcing to India and other countries. No union. No protection from my job being outsourced at any time other than my ability to add value beyond what they pay me. It's a constant learning curve. But I put in the time and the effort because keeping this job and this pay is important to me. I can't sit back thinking I'm entitled to this salary and it's foolish to think that things will never change. IMHO, too many are willing to sit back or spend their energy and money elsewhere and then become victims when things change. It does not help that, as a society, America has managed to make education "uncool".

I would LOVE to have Dubya/Condy show up for one of MY weeks...

Molly Ivins, the columnist, once commented that "George Bush was born on third base and thinks he hit a triple." Remember, his father is the one who was stunned to see a grocery checkout line with a price scanner (relatively new technology at the time). Given what it costs to become a major politician these days, though, I wonder if we'll ever again see someone rise from the ranks of "ordinary people" to high elected office....

It costs millions just to run for Presidential nomination in a major party, doesn't it?

Then to run for office against the other party's candidate - costs over a hundred million, isn't it?

To run for an office that pays, what - half a million a year?

And you may be turfed out in four years?

Yeah - right.

Good wishes to you and yours.

ole joyful

It costs millions just to run for Presidential nomination in a major party, doesn't it?

Yup. Which is one reason why lobbyists have their hands so deep in the cookie jar. And why legislation seems to favor everybody but Victor and Vanessa Voter -- who do not have any lobbyists at all and increasingly don't feel their votes make any difference anyway.

I would love to see campaigns funded only publicly, but I suspect that the stakes of election are so high that candidates would find ways to subvert the process, thereby wasting even more taxpayer money and doing nothing to resolve the problem.

I only post occasionally now.

Yup! another fan of funding elections publically. X amount of dollars, so many plastic "boaters", so many bumper stickers, so many lapel pins, and so many banners. That's all they get.

NOW... let's hear them talk about POLICY, not issues. I want to hear about balanced budgets and PAYING TO PRINCIPAL of the national debt. I want to hear about CUTS in budget, across the board. I want to hear about "means testing" for Social Security. I want to hear about RAISING the age at which you qualify for Medicare and can claim SS benefits... and we have raise those taxes, too. How about we create incentives for people who live hand to mouth to begin SAVING?

Ford and GM are sucking wind because they're STUPID. Hello?! where the hell were they in 1973... I was 14 and I was smart enough to understand that oil reserves were FINITE. I would buy an American car if they made one that was WORTH BUYING!!! HELLO?!

I drive a 2000 Taurus. I bought it cheap; it's basically a piece of junk. But it's OK for what I need. But if I was willing to buy new (a crappy "investment" IMO) it wouldn't be an AMERICAN car... .

Pisses me off that the tired old gasbags runnin' those companies "don't get it"! How long before they roll right over, show their bloated corporate bellies, and ALL THE REST OF US have to shoulder the burden of their worthless pensions?

Is my disgust showing?

Pisses me off that the tired old gasbags runnin' those companies "don't get it"! How long before they roll right over, show their bloated corporate bellies, and ALL THE REST OF US have to shoulder the burden of their worthless pensions?

Is my disgust showing?

It is, but it could fall under the term "righteous indignation". :-)

Sadly, the majority of us do it to ourselves. Every time we continue to purchase products or services from companies which abuse their employees and/or customers; engage with companies which value short-term profit above long-term growth and commitment to customers, shareholders (if any), and employees; continue to vote in the incumbent or members of a particular political party because they meet some litmus test that has little to do with governing and has only a fuzzy connection to human wellbeing; we send the message that behaving that way is alright and that deficient morals or greed or some sort of exclusive ideology (typically dictated more than practiced by the individuals in power) is acceptable.

I also think we have some very hard decisions to make in the near future. Several independent studies and statistics bear out the fact that the U.S. is not Number One in health care anymore -- a shame for a country that likes to believe it offers a quality of life second to none.

With increasing numbers of people using government services and fewer people making the money it takes to fund them, we will need to decide if some sacred cows deserve to continue living. Would we be better off subsidizing farmers to transition from tobacco to Bush's lauded switchgrass or soybeans or some other crop which could ease our dependence on petroleum from corrupt unstable regimes? Should we cast SSI less as a savings account and more like a tax which funds a very basic income floor for those who cannot do better? Should we allow our economy to slow down and "let the terrorists win" by making it worthwhile for people to save money rather than continue to prop up the economy by buying newer versions of perfectly good things they already own?

None of these choices will be without pain. But if we don't start making some of them soon, politically unpalatable as that may be, I think we can stop counting ourselves as a superpower. We're just another big country distracted by shiny objects.

We consider a guy who just lost his employment but goes on spending as thoug he he hadn't - stupid.

Headed for bankruptcy, quite likely.

Same for coutries, no?

They don't go bankrupt - but look what happens to the value of their currency.

Look at Germany after World War I - or Argentina a few years ago.

I'd suggest building an asset base, battening down the hatches for tough years ahead.

But in real assets, not local currency, for its value degrades until eventually one must carry a wheel-barrow full of bank notes to buy a month's groceries.

Note my recent thread concerning who loses due to inflation, and who profits.

Hope you have a thoughtful week.

ole joyful

A different perspective:

http://www.freetrade.org/pubs/pas/tpa-012.pdf

By almost any measure today's economy is stronger than it was 5 years ago. In a growing economy, demand for investment capital and for imports will both increase. Real GDP has grown at 3 percent or better for ten straight quarters, averaging 4.1 percent at an annual rate for the best performance since the middle 1980s. productivity has grown at a 3% + rate for almost 10 years. The lower dividend and capital gains tax rates allow ANYONE that owns equities to either re-invest or spend ... either way the economy wins.

I'd suggest that if we should to strive to gain an understanding of the economy, enabling each of us to form our own conclusions on the basis of tested principles, rather than on the basis of emotion or rhetoric.

Embrace change and prosper.

Bob

diveguy1/Bob,

Your job (maybe "succession of jobs/employment positions") haven't been downsized to offshore, I assume?
___________________________________

When all the stuff is made by robots ...

... or offshore ...

... where will the money come from, and how will it come to us, for us to buy the stuff?

Is that O.K. for me, as I'm not looking for employment, being retired?

But - wait a minute - if there aren't a lot of guys/gals working in *our* bailiwick ...

... where's the money to come from to pay my pension(s)?

Sure glad I'm not a retiree from Enron!

Their pensions evaporated into thin air a while before the company went bankrupt.

ole joyful

joyful,

>> Your job (maybe "succession of jobs/employment positions") haven't been downsized to offshore, I assume? Au contrare, never assume! I'm in the IT industry and have been since the late 70's. Ever hear of "mainframes" (DOS/VSE, VM, MVS) .... my industry has been through enormous changes and is a poster child for not only downsizing but offshoring, rightsizing, partnering etal.

It's caught many by surprise. Fortunately, I've not been one of them due in large part to my "diversification". I've adapted, embraced the underlying changes and have developed "new" skills that are much harder to outsource. In the IT industry those are client-facing expertise, business area management, negotiation, contract management, busines intelligence/analytics etc.

>> where will the money come from, and how will it come to us, for us to buy the stuff? In the US we are poor savers hence the need for investment capital is met my foreign investment. The U.S. economy is throwing off high investment returns that attract foreign capital from around the globe (where free-market capitalism, continues to spread at a breathtaking pace). That fuels business expansion and jobs. The average monthly job creation over the past two years is running at 179,000, more than five times the GM layoff total.

>> where's the money to come from to pay my pension (s)? ..Sure glad I'm not a retiree from Enron! Unfortunately many companys will not survive, even those that are today successful. Those that have all their eggs in a single basket that is dependent on OTHERS (co pension, SS etc) may want to think of taking a lump sum distribution as opposed to a lifetimme annuity. Unfortunately it appears our current courts are allowing companies to walk-away from pensions as part of reorganization and dumping the obligations on the PBGC. Legislation requiring 3rd party management (similar to 401k's) may be the only answer. In the US defined benefit plans (pensions) are going the way of the dodo.

Bob

You know what they say about statistics ... It's one thing to talk about how many jobs are being created in recent months or years; it's quite another to talk about the quality of those jobs. How much do they pay? Are any benefits offered? Do they require second- or third-shift work (which puts a strain on most families)? How many people should be covered by some kind of health insurance but are not? If people are investing for their retirement, many of them are doing so within tax-deferred savings plans, in which case lower capital-gains taxes now do absolutely nothing for them, so its presence as a measure means little.

And what about the future? What happens when pensions that people counted upon as part of their savings (and their commitment to a single employer, smart or not) disappear when the guys with the nice severance packages take the place down or sell it off? What about the strain on Social Security when there are far fewer workers supporting far more retirees? What about the day when it's no longer attractive for Asia, in particular, to invest in U.S. financial instruments and bond offerings go wanting?

I would not go so far as to characterize the U.S. economy as "booming". "Ticking", maybe ....

One thing for sure. If you have kids. Now is the time to give them some career direction. Think about career/jobs that are less offshoreable. The US labor market is quickly changing and some of us are feeling the pain (and more to come).

Though they don't mention the country by name, referring instead to Iraq, Iran ... or North Korea, for heaven's sake ...

the reason that many leaders give for needing an anti-missile system is really due to their fear of Chinese aggression.

The Chinese don't need to lob missiles at the U.S. - all that they need do is require that they pay off all of the U.S. bonds that they hold.

Which would be at least as hurtful as Pearl Harbour, I imagine.

ole joyful

Every month 30% of my salary goes into savings...

10% into my 401K
10% into gold
10% into weapons and ammunition for the coming collapse of society/revolution. :)

So Chelone, this "means testing" thing, means...

If, now in my 50's I continue to save vigorously and live frugally, I will perhaps in my 70's be denied Social Security? Because I planned and stayed solvent? While similarly paid peers now driving new cars and living in state-of-the-art, mortgaged-to-the-gills, fine homes will later pass the "means test" (having saved little) and get Social Security?

I see it all coming like the headlight of a train, and I factor that into my planning, but....I gotta say it bugs me.

Perhaps I should buy a Ferrari instead....

celtic moon,

Better walk carefully - lest you get hit by one.

But ... I guess one is just as dead ...

... if hit by a VW.

Or a Honda.

ole joyful

P.S. Did you happen to notice all the offshore names mentioned here?

o j

An Arab company is gatekeeper for U.S. ports. Sweet.

Hillary wins!!

An Arab company is gatekeeper for U.S. ports. Sweet.

I thought it was interesting that this came about because the British firm that was operating the ports was sold off to a UAE-owned company. So we weren't watching our own ports to begin with. So much for feeling safer at home....

Not the same, I know, but ...

... have you noticed that long distance rates to some of the Middle Eastern countries, including U.A.E., I think ...

... are *high*?

Have a great weekend, everyone.

ole joyful