Busted: Bankers and The Global Economy

January 31, 2009

Unemployment and Government Stimulus

economic-ideaAs Digital Economy has previously noted, the heralded stimulus plan is mostly a safety net for government services, government jobs and the disadvantaged, including the recently unemployed. What is the current ‘$825 billion’ stimulus plan going to do for the recent numbers of jobless Americans?

• $43 billion for increased unemployment benefits. Weekly benefits will go up by $25 a week and the amount of time the unemployed may claim them will be extended by at least 20 weeks, plus another 13 weeks for those in high-unemployment states.

• $39 billion for expanded health care benefits for the unemployed. The federal government will reimburse states to extend Medicaid coverage for the jobless through Dec. 31, 2010. For those who want to keep their old employer’s insurance plan, the government will subsidize their Cobra payments – paying 65% up to 12 months. Cobra eligibility will be extended for some groups of workers.

• $20 billion to increase food stamp payments by 13%. For a family of four, that means an average increase of $79 a month – from $588 now to $667 if the current legislation passes.

internet-personal-businessThe largest opportunity for economic growth, especially for small business and the individual in these times, remains on the internet segment of the digital economy. In other words, Americans need to get creative and found a personal small business based on solid business principles while employing creativity. I am not referring to internet hype or ‘affiliate business’ that has become the rage and plague of the internet. The fact remains that you cannot depend on Wall Street or Main Street Corporate America for your livelihood. Counter to the intuition of business activity and the economy, the internet remains a bright spot for many, Amazon.com among them. ~ E. Manning

November 9, 2008

American Job Crisis Solution

cash needed, not corporate bailoutsEver since job losses followed by consumer consumption hit the red zone 10 months ago, the American job crisis has worsened. What gets the most attention is still retail sales, the prospect of Big Business and consumer consumption. Every measure of economic growth is measured on that consumption. In that light, there is little hope for quick results beyond drawing unemployment unless you are willing to look for small business opportunities.

Big Business is awash in crisis amid sagging numbers. Instead of focusing on lazy investors with big pocketbooks looking for investments, consider the small businessman rising to the challenge to spark innovation and a stronger economy. Investors should look at investing in themselves for their growth.

Look to spend what hard-earned dollars you have with small business, even on the internet to support the small business that builds your economy and families like yours. Vote your confidence with your wallet. Big Business is or will be sucking down huge volumes dollars in the hopes of bailing out millions of jobs in the next few months, mostly in the auto industry for cars that nobody wants. What will done with all those cars? Hopefully, they will either sell them at fire sale prices for impoverished Americans that need them, but can’t afford them or they will resell them as next year’s model. American automakers can’t afford to be choosy with taxpayer dollars. Big business needs to be giving back in spades for taxpayer bailout money received. Forget the meager interest payments Americans will never see. The American citizens need a real boost, especially among the harder hit elderly and lower to middle income. Americans need solutions, not corporate bailouts for stupid decision-making. ~ E. Manning

November 5, 2008

Post-Election Rays of Hope?

eight-ballRetailers are strategically masterminding new ways to get you to spend your money. Considering that the cost of gasoline is down, the job has suddenly become somewhat easier. All over the world in prime economies, news articles have appeared after the U.S. election celebrating a suddenly brighter consumer picture. The picture is not exactly what it seems.

Retailers are taking drastic action through hoarding cash and cutting prices in the hope of adequately coping with an ongoing recession, projected and expected to last until about the summer of 2010 by many economists and analysts. Real world retailers are suffering greatly because of the new digital economy of the internet. Even internet retailing isn’t so rosy as businesses must cut prices in order to get the attention of consumers and keep sales even. Slumping sales have been a major problem, even among the garage sale atmosphere of Ebay, where prices can’t seem to go low enough to satisfy the buyer. The cheap cost of new goods makes the value of used goods virtually worthless. The only hope is to try to make a dollar or two on handling fees or shipping.

For the fickle world of investment, the immediate prospect looks even worse. A glut of new shopping facilities, the rising cost of importing goods and the growing impact of internet shopping are creating new pressures with the result that profitability is suffering, even as the holiday season comes full circle once again.

getting noticed

getting noticed

What most larger businesses have done is to chop into their cache of innovative ideas or even the prospect of considering them. One ray of post-election hope is for the small businessman online if he can just get the attention of the browsing public. This assumes, of course, that the public knows what it wants before they get online. That isn’t how most customers shop. Advertising is down and snafus among the gloried advertising models of Google and Yahoo don’t seem to make the prospects brighter, only muddier. This bright side for the consumer is that prices are coming down and monetary units are going farther for the first time in years. This natural price adjustment is a natural part of the cycle fueled by years, perhaps decades of abusive overpricing, lending and credit.

As former corporate employees wear out the availability their unemployment checks, reserves and pensions, they will be forced to be creative in order to survive. Ultimately, this means a boom in new small business ventures. Most of these new adventures are operating on a shoestring of personal finance, leaving investors little opportunity. Those that are willing to invest what they have in themselves will eventually encounter great opportunities as they work through the trials of getting their business model right. The small businessperson is the new ray of hope for the foundering global economy. ~ E. Manning

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