I know a good amount of my FL feel they have a good grasp on the economic tides. I know many of you are incredibly well informed, opinionated, and curious.
But this whole Recession/looming Depression/end of days thing feels beyond my little bear brain.
Perhaps it's because I'm listening to such a diverse smattering of armchair economists in addition to working for a financial institution. Now even though I do work for a business that lends and borrows, I don't work for a bank. We didn't make any of those risky loans. We are not in any sort of precarious position, but due to the general turn in the economy, we are feeling the crunch because not as many people are taking out loans. Loan business is how we leverage the money to make the interest on savings accounts stay high. Fewer loans means less interest on CDs and other deposit accounts. But that doesn't mean we're in trouble, we're still able to give better deals on loans and interest because of our solid business practices.
But this doom and gloom and zOMG, the sky is falling stuff for the rest of our economy. What do I believe? Who do I believe? The only fact that I feel comfortable believing is that the main reason the banks have stopped lending is because they don't know the value of their assets due to the housing market tanking.
But my simple little bear brain says "I don't quite get some elements of how the market works."
For example: -Oil companies reporting the highest profits ever. -Bank and Insurance top executives getting tens of millions in yearly salaries while allowing their companies to make nationally destructive financial decisions. -Jobs going to other countries -Bleeding millions funding a war that isn't making sense. -Health care is getting more expensive, our options for good care are decreasing, malpractice is escalating, and the support staffs are skeleton crews on insane hours for inadequate compensation. -Corn was touted as a viable biofuel which drove up prices for livestock feed (even though we overproduce corn anyway, and farmers get subsidized for not growing it) which caused the prices of meat, milk, and eggs to skyrocket and the fuel costs more because it doesn't give the same gas mileage.
Individually, I understand why we're doing/allowing these things, but it seems to me that it isn't working right. The system we've believed in is failing us hard. So what do we do? I have no faith in the government. They aren't working for my interests, they are working for the interests of those who are filling their pockets. I have no faith in the market to sort it out because it's floundering.
So...what has to happen before we figure out what our new normal is? An administration change in either direction can only have so much effect.
Is this the fall of an empire or a temporary belt tightening? I honestly don't know.