The Economy, Recession, and Recovery

Economists are still waxing grim about the new unemployment figures
released by the Department of Labor last Friday, estimating current
unemployment levels at 8.1%, the highest since 1983. The AP looked
specifically at 3 markets - housing, jobs, and stocks - and consulted
experts on past trends as well as future predictions.

First, the job market.

Economists are predicting that our troubles with the job market are
not over. Some experts predict that the unemployment rate will top 9%
nationally this year. Some states are weathering this storm worse than
others. In my state, Michigan, January figures put unemployment at
11.6% and climbing and predictions are even more dire.

Economists are focused on 1983 right now, but with this year's current
prediction of 9% unemployment, we're still sliding in under the
December 1982 record of 10.8 percent. Still, it's looking for a silver
lining in a very dark cloud that shows no sign of passing overhead any
time soon.

Even if the economy does turn around, it will most likely still be a
weak market for 4 or more years, based on predictions. In the
meantime, Michigan in particular will keep reeling as plants keep
closing. According to Michigan's WARN list, a large number of
companies are doing mass layoffs or closing plants this season. Many
of them are automotive-related, but not all. Personally, two of my
local friends got laid off last week and only one was in the
automotive industry.

Secondly, the housing market.

It's no surprise to anyone that house values have dropped. In January,
they're down 14.8 percent from just a year ago according to the
National Association of Realtors. Areas that were previously dealing
with the housing boom are harder hit by price drops than Detroit, but
that's because we were having difficulties in Michigan before the
recession even hit.

The housing market is complex, though.


We like to look to history to
determine the future, and the Great Depression is often brought up
when talking about the current state of our economy. As it relates to
housing, home prices fell about 30 percent during the Depression.
Regardless, according to the National Association of Realtors, it will
take a while for any stimulus to affect housing data.

Thirdly, many economists and industry experts are focused on stock.
The stock market peaked in October, 2007. At this point, it's now less
than half the value it was then. Experts agree that the market has
survived worse, but many of them were surprised that it fell as far as
it has.

As for predictions regarding stocks, we look to the investors to tell
us if things are picking up. Investors are watching the markets
carefully, waiting for all markets to pick up as well as signs of
increased consumer spending, and we're waiting for them to start
reinvesting in the market. This is a follow up to an article I did
this past week on the economy and the newly released employment rate
figures.

Obama and his 10 year budget plan - Doom?

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Politicians at every level are often jeered for trying to be all
things to all people, no matter how disparate their interests and
objectives may be. President Barack Obama campaigned on the idea of
change; the underlying hope of the potential for change from
theObama's 10-Year Budget Proposal "business as usual" in Washington
was the message I believe brought voters to the polls.

On February 26, 2008, President Obama gave the nation yet another
glimpse of not only how he envisioned changing the way business is
usually done, but how he is actually going about making those changes
a reality when he truthfully revealed his first budget for the U.S.
while in office.

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The president was candid—he didn't tell the nation
what they wanted to hear, but he told them what they needed to
hear—and his budget reflected items that his predecessor kept on
separate books, so to speak, including funding of the wars in Iraq and
Afghanistan as noted by newsday.com, among other major line items.

President Obama outlined a 10-year budget plan that includes his
pledge to halve the budget deficit by 2013. He and the nation face a
tight-rope walk with the current economy. Refreshingly, the president
gave the information straight on the chin.

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For every change that is
desired, there are choices to be made and costs to be incurred—that's
the way it is in the real world. As individuals, we face these
realities every day when we choose whether or not to purchase a new
car, whether this week we will eat bologna or steak, or even if we can
afford to refill our prescriptions.

For the first time in a very long time, it feels as if Washington and
each citizen of the U.S. is in this situation together. It's not a
pretty place to be, but it is together that as a nation we have the
greatest strengths.

The proposed budget must first, of course, make it through Congress.
It's time for each of us to examine the president's proposals and
write our senators and representatives to let them know what we do and
do not support about the budget so they canObama's 10-Year Budget
Proposal act accordingly. That is how a democracy is supposed to work
and finally, American citizens have someone in the most powerful
position in the nation who is leading by example.

Fighting Rush Limbaugh

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Chairman of the Republican National Committee Michael Steele has angered quite a few people in the Republican Party by some harsh words he uttered about Rush Limbaugh during an interview on CNN.

Michael Steele said of Rush Limbaugh, "Rush Limbaugh is an entertainer. Rush Limbaugh—his whole thing is entertainment. Yes, it's incendiary. Yes, it'sMichael Steele Picks a Fight with Rush Limbaugh ugly."




Rush Limbaugh, who has never allowed an attack to go unanswered, was quick to respond. "The Republican National Committee and Michael Steele need a little leadership ... we're going to have to drag them kicking and screaming back to our core. They are caught up in so much fear because of where they live and work in Washington, DC."

On the surface it would seem to be an act of lunacy for Michael Steele to pick a fight with Rush Limbaugh, who is beloved by the Republican base, Rush Limbaugh's speech before CPAC on Saturday was the hit of the Washington conference.

Michael Steele seems to be reacting to the gibes by Obama administration officials such as Rahm Emanuel that Rush Limbaugh is, in effect, the leader of the Republican Party. The tactic being employed by the Democrats appears to be to tie the Republicans to Rush Limbaugh while vilifying Rush Limbaugh as some kind of bomb throwing extremist. Rush Limbaugh's often stated wish that Barack Obama should fail in his policy initiatives is being depicted as little short of sedition, unlike Democratic attacks on President George W. Bush.

The Democratic tactic appears to be having the effect of driving a wedge between Washington Republicans such as Michael Steele and the Republican base, represented by talk show hosts such as Rush Limbaugh. The Republican base has already been discontented with many Washington Republicans for their perceived lack of fiscal discipline and their over eagerness to make compromises with Democrats.

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Michael Steele has attempted to heel that rift, as have Congressional Republicans. Clearly Michael Steele's ill considered attack on Rush Limbaugh represents a setback in that effort, angering Republicans in general and Rush Limbaugh in particular. Fortunately there is an easy way to heal the rift. Michael Steele needs to go on Rush Limbaugh's show and offer an explanation and a mea culpa. If Michael Steele can be sincere and not repeat the mistake, all will be well and all will be forgiven. After all, after Al Qaeda and Iran, the Michael Steele Picks a Fight with Rush Limbaugh real enemies are Barack Obama and the Congressional Democrats. Michael Steele needs to direct his fire at them and not at the man who has been called "leader of the opposition" for at least the past fifteen years.