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It isn't hard to describe the scene on the ground here in California. There are countless empty store fronts, empty houses, more people roaming the street than I've ever noticed before.
The news programs seem to be trying to make reality change by NOT reporting on the level of difficulty that so many people find themselves in. It's a mess out there and people are afraid.
Lack of health care is rampant. People are simply ignoring health issues because they cannot afford to pay for preventive care, medication or early detection. I suspect there will be many early deaths within the current population because of neglected health care.
Unemployment is terrible. One town near me has over 20% unemployment! One in five people unemployed among about 40,000, that's 8000 people without jobs, wow!
Housing prices dropped 19% compared to the same quarter in the previous year I heard on the news the other day. In California it is worse than the national drop of 33%. My house sold in 2005 for 263,000 and in early 2009 was put on the market after it was foreclosed for 119,000, that is a 55% drop in value.
More people are losing their credit and therefore their ability to get credit and therefore their ability to survive for any period of unemployment. And the bank response to this is sad and shameful; after taking federal money, the banks respond to people getting behind by jacking interest rates up so as to make even catching up impossible.
The California state government is broke with a growing deficit. Huge numbers of state workers are about to be laid off and programs will be cut. This raises the numbers of unemployed people, the numbers of businesses that will go under due to lack of people with money to spend, the number of people who are suddenly without health insurance, and all this just among the employees.
Every person who goes under financially deepens the crisis. There is no doubt that sales taxes will continue to drop as people spend less. There is no doubt that property tax will continue to drop as the property values drop and as property tax assessments are lowered.
Government receiving less money employs fewer people and supports fewer people via programs. The poor get poorer, the middle class gets poor and the rich, well who really knows except the rich, the poor-rich gap probably won't proportionately change much as the entire scale slides downward.
Within the business I work in, the chart has been steadily falling since last October. Less work each month comes in and is contracted. Fewer crews are getting fewer hours each and every month. Business is dropping and dropping and dropping. We're all openly worried now that the business could go under.
So where I ask is the stimulus? Where is the upswing? Are we in fact backing away from the edge? Or is this "positive propoganda" all fiction to make us feel better about the money thrown at the large companies and the money about to be thrown? The only good news is when a particular metric slows its deline slightly, smoke and mirrors.
I can tell you from the trenches, from my own personal perspective on the ground level of this economic earthquake, that the stimulus isn't stimulating anything. The rhetoric on Capitol Hill isn't true. Things are getting worse, not better. Things are bad, real bad. I would not be shocked at another stock market crash sometime in October.
Other Economic Note:
A news report the other day indicated that the California State Teachers' Retirement System within the next 12 months will ask the Government for a bailout because of all their bad investments. That is incredible to me since they just built an enormous glass tower across the river from Old Town Sacramento and bought a highrise in Manhattan. I think they ought to be forced to sell those buildings and other investments if they're cash-poor. Why should the taxpayers bail out a fund that tax payers paid for because the fund was over-leveraged with bad investments? Adding insult to injury are the enormous bonuses paid to STRS investment officers in spite of the loss in value of the fund recently. (CalPERS, CalSTRS award big bonuses despite losses, sacbee.com)
To quote Paul Newman's movie son in the movie, Road to Perdition, "It's all so fxxxing hysterical".
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