The Opinionator

Did Stimulus Checks Really Boost the Economy?

Shannara Johnson — Tue, 29 Jul 2008 14:18:00 GMT

It's over and done with - on July 11, the last stimulus checks designed to circulate through the U.S. economy and give it a much-needed boost, poured into American bank accounts. Now all we had to do was spend, spend, spend... just like Mr. Bush told us to. After all, it's our patriotic duty.

But has it worked?

"Stimulus checks boost spending," reported the New York Times on June 27. "Consumer spending rose by a nine-month high of 0.4 percent in May, with $48 billion in federal tax rebate checks lifting personal income and savings, the Commerce Department reported this week. At the same time, personal income rose by 1.9 percent, up from 0.3 percent in April, while the personal savings rate increased by 5 percent, the highest reading since March 1995, the report said."

Out of curiosity, this week I did a private little survey among friends, relatives and coworkers, as well as in a few message forums on the Internet.

I posted the simple question, "What did you do with your stimulus check?"

53 people replied, and even though this small number is by no means representative, I found the results quite telling. [Note: I allowed for multiple answers, since one check may have been spent on different items.]

Of all the responders, 30% did not receive a stimulus check. Of those, 68.7% said they were not eligible, 12.5% hadn't filed a tax return, and 12.5% stated that their checks had been seized to pay for back taxes and other government arrears.

Of those having received a check, only 29.7% set out to stimulate the retail business. A whopping 43% said they put all or part of the money into a checking or savings account (21.5%), invested it or bought precious metals (13.5%), or kept it in cash under the proverbial mattress (8%).

For 45.9%, all or part of their stimulus check went toward utility bills and car repairs (29.7%), property taxes (5.4%), rent/mortgage (10.8%), and other living expenses (5.4%).

For some, the extra money has just been a welcome band-aid to make it through another month. One of the surveyed stated laconically, "I planned on buying shoes and other meaningful things, but by the time the check came, my financial situation was so desperate that it just filled the hole for this month." Another noted that "it saved my butt from going under at that particular time."

Even among those who bought "stuff," 54.5% spent some or all of the money on "sensible" things, such as home repair/improvement or necessary household items. 72.7% said they spent at least some of the money on fun or luxury items.

The National Retail Federation (NRF) reports that one-fifth of parents have saved at least a portion of their stimulus checks for back-to-school shopping. Back-to-college spending is expected to drop 7% this year.

"College students are learning a hard lesson that when economic times are tough, fun purchases take a back seat," said NRF President and CEO Tracy Mullin in a press release. "While students will still be buying school supplies, they will scale back spending on clothing, electronics and dorm furnishings."

By and large, that's a far cry from the piles of flat-screen TVs, computers, iPhones, clothing and jewelry the Bush administration and our congressmen expected to fly out the stores.

Bloomberg tells us that "the effect of the tax rebates is already fading." Retail sales rose a less-than-forecast 0.1% in June. J.C. Penney's same-store sales decreased 2.4% percent in June, a result that, while better than the company's own forecast, was worse than analysts' estimates.

Maxwell Clarke, chief economist at IDEAGlobal Inc. in New York, told Bloomberg: "Whatever support you're seeing for the economy, it's probably going to be short-lived. What's going to keep the consumer spending beyond the rebate checks?"

Why, another wave of rebate checks, of course. Congress is already working on it: the sequel to the $100 billion package, if it passes, would likely be in effect by October, with checks being sent out early next year. Better luck next time? I doubt it.

IMF to Dig into America's Financial Closet

Shannara Johnson — Mon, 30 Jun 2008 11:30:00 GMT

And they are sure to find a skeleton there. Heck, they'll probably find a mass grave.

Last Thursday, the German magazine Der Spiegel broke the news that the times of U.S. exceptionism are over.

"Officials with the International Monetary Fund (IMF) have informed Bernanke about a plan that would have been unheard-of in the past: a general examination of the US financial system. The IMF's board of directors has ruled that a so-called Financial Sector Assessment Program (FSAP) is to be carried out in the United States.

"As part of the assessment, the Fed, the Securities and Exchange Commission (SEC), the major investment banks, mortgage banks and hedge funds will be asked to hand over confidential documents to the IMF team. They will be required to answer the questions they are asked during interviews. Their databases will be subjected to so-called stress tests -- worst-case scenarios designed to simulate the broader effects of failures of other major financial institutions or a continuing decline of the dollar."

Der Spiegel called the IMF's action "nothing less than an X-ray of the entire US financial system."

Bush has thus far stalled the FSAP, which one-third of IMF member countries have already undergone, says Der Spiegel. "For seven years, US President George W. Bush refused to allow the IMF to conduct its assessment. Even now, he has only given the IMF board his consent under one important condition. The review can begin in Bush's last year in office, but it may not be completed until he has left the White House."

Good for him. And he'd better be far away on his rumored Paraguayan estate when that happens. Otherwise - with the undoubtedly abysmal picture that's going to result from the IMF's examination - he could find his domicile surrounded by an angry lynch mob.

Bernanke, though, will still be in office by the time the IMF is finished with the U.S., in ca. 2010. He must be sweating at the thought already, maybe hoping for a way out by an act of God... a heart attack, a stroke, anything.

Amazing, by the way, that a German magazine broke the story. It's going to be interesting to see how long the American lame-stream media, which for months have insisted that everything is A-OK in this country and better times are just around the corner, will take to pick up on this breaking news. Watch your news web sites, but don't hold your breath.

[By the way, if you recently read anything by our Casey Research visionaries Doug Casey, Bud Conrad or David Galland, you already know what the IMF will find and the potential extent of the calamity that's brewing on the horizon.

If you want to know how to protect yourself, check out Casey's brand-new publication, The Casey Report, our spinoff of the International Speculator. The Casey Report deals with big-picture economic trends and the many ways you can protect your assets and profit from the crisis. I've seen the inaugural issue (it's not published yet) and I can tell you, it's pretty spectacular.

Tomorrow, July 1, we will officially split the International Speculator and The Casey Report. So if you can manage to sign up TODAY, June 30, as a current subscriber to the International Speculator you will get both the IS and the new Casey Report as a two-for-one. It's a really good deal, I'd say. And as always, there's a 3-month, 100% money-back guarantee if you don't absolutely love it. Here's the link: http://www.caseyresearch.com/crpmkt/crpSolo.php?id=118&ppref=OPN118EA0608A]

[Add-on 7/2/08: I just heard that we're extending the two-for-one another month as a special introductory offer -- so you have until July 31 to "git 'er done."]

Mother Nature Strikes Back

Shannara Johnson — Mon, 02 Jun 2008 16:52:00 GMT

Did you notice that all kinds of natural disasters seem to come down on us hard and fast lately, in just about every corner of the globe?

Everyone who watches the news has of course heard of the recent, devastating earthquake in China that has killed about 70,000 people. And now the Chinese survivors may also have to deal with flooding from the so-called “quake lakes,” alpine lakes created by the earthquake whose fragile natural dams could give way at any moment.

We’ve also heard about the equally devastating cyclone catastrophe in Myanmar, with 133,000 reported dead or missing. Closer to home, the National Weather Service stated that 2008 is likely to break the U.S. record for the number of tornadoes in a year, with a preliminary count of 1,191 twisters so far. The current record is held by the year 2004 with 1,817 tornadoes, and we may yet surpass it.

But aside from these events widely promulgated by the mainstream media, there is another, lesser-known and rather destructive phenomenon going on that could come right out of a bad horror movie.

Now, I’m not exactly known as a Bible thumper, even though I have my own wayward spirituality I subscribe to. But even I was reminded of the biblical plagues when I read about this one. The new plague attacking America from the south is… ants.

More precisely, “Crazy Rasberry Ants,” a species that is believed to have arrived by cargo ship and that has been to date unknown in this country. The flea-sized mini-pests apparently feel attracted by electrical equipment and have a voracious appetite. So far limited to the state of Texas (but probably not for long), they have already caused power blackouts, malfunctions in fire alarms, and failures in computers and other electronics.

The ants, whose name comes from their erratic zig-zagging – they don’t march in orderly lines like other ants – and from the name of the first exterminator who tried to get rid of them, are all but unstoppable. They don’t respond to the usual ant repellants and killers, and they are so tiny that they get into every nook and cranny before you know it. First spotted in 2002, meanwhile they have spread throughout the greater Houston area, and according to the Houston Chronicle, “homeowners daily sweep up dust bins of their dead and maimed.

“Jason Meyers, a Texas A&M University entomology doctoral candidate who has studied the ants, said no one is certain where they came from. What is known, though, is that their range rapidly is expanding. Two poisons – Termidor and Top Choice – are available to exterminators, but unless a sufficient ‘buffer zone’ is established around an infested property, additional ants simply will crawl over the bodies of their fallen comrades.

“Rasberry said he treated a half-acre plot with insecticide, returning months later to find the area covered thickly with two inches of dead ants. Living insects teemed on the top layer of insect corpses.”

The ants have been seen to short out pipeline valves, clog up well and swimming pool pumps, destroy computer hard drives and other electronic equipment. What’s worse, they have been sighted on the grounds of NASA’s Johnson Space Center and near Hobby Airport, Houston’s oldest commercial airport.

"There are heavy populations right on the edge of Hobby Airport," Rasberry said. "If you set a plane in a hangar or on the tarmac, they will get into anything sitting on the ground. That's a significant concern. I don't know if they (aviation officials) are aware, but we've told a few customers who own private planes they keep at Hobby."

I don’t know about you, but if I were an astronaut or someone flying into Houston on business, I’d be very uncomfortable knowing that a swarm of minuscule critters might have infested the electronics of the spacecraft about to shoot me into outer space or of the plane I’m about to board. But that’s just me, of course.

The Credit Card Crunch

Shannara Johnson — Fri, 25 Apr 2008 19:23:00 GMT

Yesterday my husband received a letter from his credit card company, saying that they, "serving their customers' best interests," would reduce his credit limit by half, effective immediately. As you can imagine, this caused a considerable uproar in our household. We'd never been late on payments, in fact, we usually pay off our balance every month. We never maxed out the card. We've been good little customers. So why in the world would the company halve his credit limit?

My husband decided to have a personal word with the company, and after being transfered back and forth a couple of times, one rep told him that "you're not utilizing the full amount of credit we've given you." In other words, "You don't really need that much, so we just reduced what you can get." My better half lost no time pointing out that the higher your debt utilization ratio, i.e., the amount of credit you use, the greater the risk of hurting your FICO score. And the company was saying you have to max out your credit in order to retain your full limit? It didn't really help that the rep pointed out that the company was in the process of doing the same thing to at least another 90,000 of its customers.

Something smelled fishy to me. So I decided to give my trusted Google a try and found an article on smartmoney.com, titled "Credit Card Companies Put Tighter Squeeze on Cardholders."

The article stated that "Faced with a growing wave of delinquencies, [credit card companies are] tightening lending standards considerably, focusing on card members they perceive at highest risk of default. [...] Unfortunately, these days lenders are expanding the definition of high risk to include many consumers who would have been considered good customers just months ago. Now, cardholders can be subject to greater scrutiny based on where they live or what type of business they run.

"[...] American Express CEO Kenneth Chenault said the company is 'implementing targeted line reductions for specific segments of our portfolio representing the greatest risk,' including card members 'holding subprime mortgages and small businesses operating in specific industries, such as mortgage companies, home builders and construction-related businesses.' Furthermore, he noted that the company is 'adjusting credit models to reflect the higher probability of default that exists during a weaker economy, and in geographies that have been most impacted by home price declines.'"

So that was it. My husband is a home improvement contractor -- and they were cutting him down as a potential delinquency risk, no matter how good his credit history with the company was. Other customers have reportedly seen their credit limit shrink after paying down lump sums on their credit card debt. In credit card company lingo, this practice is called "Chasing the Balance." Some people who missed the companies' notice of change because they were on vacation or a business trip, unwittingly exceeded their newly slashed limits, resulting in steep penalties, higher interest rates and a lowered FICO score.

Spooked by the subprime meltdown and an economic crisis in the making, credit card companies have started to get cautious. And who could blame them: as the U.S. economy slides downhill, jobless claims rise and skyrocketing food and gasoline prices hit the average American hard into the wallet, credit card delinquencies, naturally, have gone up as well. According to a recent study by RiskMetrics Group, the number of credit card accounts at least 60 days delinquent or that had gone into default increased to 7.6% in December 2007, up from 6.4% in December 2006. Total revolving debt in the U.S. had reached $944 billion in December 2007... a seasonally adjusted annual increase of 2.7%. And American Express just announced that uncollectible debt in the company's credit card unit rose to 5.5% of loans, from 4.3% in Q407.

So, of course it's understandable that credit card companies are getting squeamish about whom to lend money to. And the ramifications can hit anyone who happens to work in one of the "at risk" industries or has the misfortune to live in an area where foreclosures have been up. I'm just wondering what will happen when -- not if -- this practice of cutting down customers' credit limits becomes widespread. Americans in lower income categories, already struggling to pay their bills and often falling back on their credit cards as a last resort, will lose their last way to make ends meet. Look for bankruptcies popping up around the country like mushrooms after a summer rain. And possibly a lot more new residents in America's tent cities.

Tent Cities: The New American Poverty

Shannara Johnson — Fri, 11 Apr 2008 15:20:00 GMT

Just a few months ago, I heard of a tent city in Los Angeles for the first time—home of the poor, down-trodden and, in recent times, of people who lost their homes to foreclosure.

This week my attention was captured by more of the same news. It seems that there are tent cities springing up all across the country. And in the wake of the developing recession, they are more and more populated with the working poor, people who hold a job but can’t afford decent housing.

Tent cities are not a new phenomenon; an article on Wikipedia, for example, mentions four tent cities, in St. Petersburg, FL, Seattle and King County, WA, and Toronto, Canada. But these are just the tip of the iceberg.

Yesterday, George Ure of www.urbansurvival.com posted numerous emails from subscribers who reported about tent cities in or near their hometowns. For obvious reasons, there are more tents to be found in the southern parts of the U.S. than in the northern, but by and large it appears that we’re looking at a trend here.

Some of the camps have been “adopted” by local churches, and some municipalities, like the city of Olympia, WA, recently passed laws recognizing and regulating tent cities. But most American cities, trying to keep the sight of blight away from tourists and well-do-to residents, have cracked down on the camps, dissolving or moving them to other, less visible places.

A March article by Digital Journal reported that “Southern California has seen a massive increase in resident in its tent city, housed on vacant land between railroad tracks and the airport. The camp sprang up in July of ’07 with 20 residents, and now boasts over 200 and is growing daily as the region east of Los Angeles continues to experience massive foreclosures. Most residents live in tents, some in mobile homes in various states of disrepair, their possessions crammed in with them or spread out on the ground.”

A recent Reuters article about a tent city in Ontario, CA confirms the trend: “As more families throw in the towel and head to foreclosure here and across the nation, the social costs of collapse are adding up in the form of higher rates of homelessness, crime and even disease. While no current residents [of the camp] claim to be victims of foreclosure, all agree that tent city is a symptom of the wider economic downturn. And it’s just a matter of time before foreclosed families end up at tent city, local housing experts say.”

In light of the fact that the recession has only just begun, it is rather worrisome to see how far the country has already sunk. What will it be like in the throes of a really deep recession, or even, as some financial pundits—including Casey Research’s own Doug Casey—predict, a “Greater Depression”?

We live in “interesting times,” indeed.

Where Will America's New Brain Elite Come From?

Shannara Johnson — Thu, 13 Mar 2008 18:12:00 GMT

Does it only appear that way to me, or are Americans getting dumber and dumber? Of course, I could slip into a tirade about the possible mental prowess of anyone who elected George W. Bush into office – twice – but let’s stick to the facts instead.

Jon D. Miller, a political scientist at the Center for Biomedical Communications at Northwestern University Medical School in Chicago says, only 20-25% of Americans are “scientifically savvy and alert.”

According to his studies, most American adults don’t understand what molecules are… less than a third know that DNA is a key to heredity… 90% don’t know what radiation is… and nearly one in five Americans thinks the sun revolves around the earth – a belief that was abandoned in the 17^th century.

In a 2006 survey by National Geographic, questioning young adults (18-24) on national and world geography, only 50% were able to locate the state of New York on a map of the United States. On a world map, 6% missed the entire country. 29% of the polled believed the U.S. has a population of between 500 and 750 million, another third guessed 1 to 2 billion.

Is it lack of IQ or a dismal level of education that’s responsible for this knowledge gap? If I take into account an experience with my 19-year-old stepson, a bright college student with a proven IQ of 148, I can only assume it’s the latter.

We spent a family evening playing Pictionary, a game that revolves around how fast you can draw a picture for your team mate to recognize. The words to be drawn range from actions to objects, persons and places. In one round, my stepson took a card – the category was “Person” – and looked at it blankly.

“I don’t know who that is,” he said to his father, shrugging, and held the card out for us to see. Our eyes widened in disbelief – the term was: “Jimmy Carter.”

That was the second of two experiences I recently had. The other happened in the supermarket, where I was doing some grocery shopping. My bill was $16.33, so I handed the kid at the register a $20 bill. After he had already typed in the number on the register – the display dutifully telling him “Change $3.67” – I realized that my wallet was already bursting with silver (or what goes for silver these days), so I gave him an extra 33 cents to round up my charge.

He froze in his tracks, staring at the change I had given him for about a minute. I didn’t say anything because – not very nice, but in the spirit of true science – I wanted to see how long it would take him to figure it out. At first he tried to give my change back to me and I refused. Finally, after another paralyzed minute or two (during which I could almost hear the whirring of his mental gears), he gave me $3.79.

I couldn’t believe it: it was obvious that this kid was fresh out of high school, and I would have expected his math skills to be at their prime. A friend explained to me later that students these days are only taught mental math in the first few grades; then they’re equipped with calculators for the rest of their school days. And Dubya’s much-touted “No Child Left Behind” program has only served to help even the least capable students graduate without damaging their tender spirits.

So, back to my original question: Where will America’s future scientists, professors, and visionary thinkers come from? Maybe we’ll have to import them, like everything else – I hear the education in China and India is pretty good these days.

Recession or Not? Look at the Oscars!

Shannara Johnson — Mon, 03 Mar 2008 19:30:00 GMT

Aside from the fact that the 80^th Academy Awards show will take its place in history as one of the most boring Oscar shows ever, I noticed another thing about it: all of the Best Picture nominees seemed exceptionally depressing and moody.

· No Country for Old Men, the winner, was described in reviews as “dark and haunting masterpiece.”

· There Will Be Blood, a movie about an evil and ruthless oil man; a Washington Post reviewer called it “a searing, apocalyptic and finally breathtaking drama.”

· Michael Clayton has a theme similar to Erin Brockovich, but with a much greater air of tragedy; George Clooney’s character looks grim and troubled throughout the movie.

· Atonement, the story of a woman seeking forgiveness for having ruined a teenage friend’s life.

· Juno, a drama about the struggles of a pregnant teenager.

You may ask what that could possibly have to do with a recession. In a word: everything.

As our resident investment guru Doug Casey, by nature a very observant man, notes in the just published March edition of the International Speculator, “A society’s mood is obviously reflected in its art, literature and movies…”

“I’m told hemlines are coming down,” he writes. “There definitely seems to be a correlation between skirt lengths and stock prices. Skirts were short during the ‘20s, the ‘60s, and in recent years – all times of boom. They were long from the ‘30s through the ‘50s, and then again in the ‘70s – times which ranged from grim to uncertain.”

(By the way, if you haven’t read the International Speculator yet, I strongly recommend you start right now. Check it out. < http://www.caseyresearch.com/learnMore.php?pubId=1>)

Back to the topic at hand: “grim to uncertain” sounds just about right to describe the situation in the U.S. these days… with millions of layoffs in an ever-growing sleuth of industries across the country, with oil at $102 at last count and food prices steadily climbing, and with a potential trip to the poorhouse for many of the holders of another 2 million ARMs due to reset this year. And let’s not forget the Forever War in Iraq and the very real possibility of a future war with Iran.

But do movies really reflect that mood?

Just for fun, I checked the Oscar nominees of March 2001, a time before the proverbial *** had started to hit the fan. The winner was Gladiator with Russell Crowe. The other nominees for Best Picture were: Crouching Tiger, Hidden Dragon, a martial arts/fantasy film; the sensual movie Chocolat; the aforementioned Erin Brockovich; and Traffic, a thriller about the drug trade. Gloom factor: 0 in 5.

It seems that in the first years after 9/11, the mood was still elevated, despite the WTC attacks. In 2002 A Beautiful Mind – a movie about a brilliant but bipolar scientist – won Best Picture. The other nominated movies were Gosford Park, a British whodunit film; In the Bedroom, a father killing his son’s killer in revenge; Lord of the Rings: Fellowship of the Ring; and Moulin Rouge, a bohemian musical. Gloom factor: 1-2 in 5.

In 2003 the big winner was the spirited musical Chicago, with co-nominees Lord of the Rings: The Two Towers; The Hours, a drama about three women of different generations; Gangs of New York and Polanski’s The Pianist. Gloom factor: 1-2 in 5.

2004 saw Lord of the Rings: Return of the King awarded with the Oscar. The other nominees were Seabiscuit (the story of a famous race horse), Lost in Translation (an awkward comedy with Bill Murray), Master and Commander (a historical naval flick) and Clint Eastwood’s crime thriller Mystic River. Gloom factor: 0 in 4.

Even though exit polls at the 2004 primaries showed that concerns about the economy took the top priority with voters, median home prices were up 9.1% from the year before, mortgage rates hit several record lows and all in all, things seemed a-OK.

The first noticeable change occurred in 2005, when Million Dollar Baby won, a boxing movie with tragic ending. However, the contenders were still of the more light-hearted kind: Aviator (the early years of Howard Hughes), Finding Neverland (the story of J.M. Barrie and how he came to write “Peter Pan”) and Sideways (a road trip comedy for wine tasters). Gloom factor: 1 in 4.

In 2006, Brokeback Mountain, a tragic story of two gay lovers, won the Oscar. The runner-ups were: Good Night and Good Luck (about the McCarthy era), Munich (the 1972 murders of 11 Israeli athletes at the Olympics), Capote and Crash (a movie about bigotry and racial stereotypes). Gloom factor: 2-3 in 4.

In 2007, The Departed won. The other nominees: Babel, Letters from Iwo Jima, Little Miss Sunshine and The Queen. Gloom factor: 3 in 5.

This year, as mentioned above, the gloom factor is 5 in 5. Can the mood get any lower? I’m pretty sure it can… and probably will.

The Value of "Things"

Shannara Johnson — Fri, 22 Feb 2008 20:55:00 GMT

I just stumbled upon two very different pieces of information – in fact, they were so diametrically opposed to each other that I sat up and took notice. The first was an ABC news report with the headline As Economy Slips, Yacht Sales Skyrocket.

“That's right,” states the author sardonically, “while the U.S. economy slows — if not enters a recession — the demand for these toys for the ultrarich has never been stronger. Several luxury shipyards have seen sales double in the last five years. The rich are not just buying more yachts, but larger and larger ones.”

Which made me think of some financial pundits’ predictions that, as the economy declines further and the average Joe has a lot of month left at the end of the money, we might soon see calls for tarring and feathering the rich.

And frankly, who wouldn’t get hot under the collar when they read that Countrywide – yes, the same mortgage lender that last October posted a $1.2 billion third-quarter loss after writing down $1 billion in subprime lending losses – is treating about 30 mortgage bankers to a ski-resort trip in Avon, Colorado. Rooms start at $750 a night, and dinner is at the Spago restaurant, “whose menu includes Kobe steak with wasabi potato puree for $105.” Thanks for the grub.

On the other hand, most of us would probably do the same if we had that kind of money. And haven’t we, in fact, done the same already – just on a smaller scale?

After all, in the past decades America has turned into a Disneyland of consumerism. U.S. consumers have piled up unprecedented levels of debt, and statistics from the Bureau of Economic Analysis show that the personal savings rate has been negative for 16 months. The UK MarketOracle reports that “Consumer debt has outpaced, by 18.7 percent, the amount of income left after the payment of bills each month, meaning that for millions of families the cost of living is substantially higher than their monthly incomes can accommodate.”

Of course, some of that is due to the housing crisis, but let’s be honest: not all of it. To a large part, the debt incurred stems from Americans’ insatiable hunger for buying on pump. Why save when you can have it all today, no money down and no payments till April 2009? And why live frugally when there’s so much tempting stuff out there?

“More is better” has been the country’s credo since at least the ‘80s. Alas, consumerism is now consuming the consumers.

Which brings me to the second piece of information I mentioned earlier: it was a Google video of Dr. Randy Pausch, a 46-year-old science professor at Carnegie Mellon University. In 2007, CMU launched a “Last Lecture” series, prompting its professors to imagine their imminent death and writing a lecture about the things that mattered to them most. For Pausch, though, it was not a hypothetical situation: diagnosed with inoperable pancreatic cancer, he conveyed in a short but touching lecture dedicated to his three children what’s most important in life.

One of the points in his speech that I found especially memorable was when he said he was lucky that his parents taught him about the value of people vs. things. He describes how he bought his first “shiny convertible” and picked up his niece and nephew for a weekend stay-over.

“And I just show up in my new car and my sister’s explaining to Chris and Laura: ‘It’s Uncle Randy’s new car, you can’t get it dirty…’ – and they’re just cracking up laughing because over her shoulder, I’m casually opening a can of soda and just emptying it on the backseat.

“And they come running over and my sister goes, ‘What are you doing?’ and I said, ‘It’s a THING. It’s just a thing.’

“And I’m really glad I did that, because at the end of the weekend, as I was driving them home, little Chris, who was about eight at the time, got the flu and he threw up all over the backseat of my car. I don’t care how much value you get out of owning a nice, shiny, pristine thing – it’s not as good as I felt knowing that I made an eight-year-old boy not feel guilty just because he had the flu.”

[View Pausch repeating his “Last Lecture” on the Oprah show here.]

You may scoff at me citing such an obvious tear-jerker, but let’s stop for a moment and contemplate how “things” run our lives. How often do we shoo our kids away because “Mommy/Daddy has to work” to buy more THINGS? How often do we stay late at the office because “work always comes first”? And how many THINGS do we actually need – is it really so important to have a $500,000 home, a flat-screen Hi-Def TV, an IPhone, a Wii Box, and to switch our SUV every three years for the newest model?

A best-selling 1992 book titled Your Money or Your Life (Joe Dominguez and Vicki Robin, Penguin Putnam) measures money in life energy. It basically says that for every dollar you earn, you expend life energy (= work). So if you make $20 an hour and buy something for $20, you spent one hour of your life energy. Write down for a week or two all the things you’re spending money/life energy on, and boy, I’m telling you, it does put things in perspective.

Before you accuse me of getting all mushy, I’ll stop here. But I believe that in the future (maybe the very near future), we will probably be forced to exchange our old motto “More is better” for another, more feasible one to get us through tough times. How about “Less is more” or “Enough is enough.”

Illegals Leaving the Sinking Ship?

Shannara Johnson — Fri, 15 Feb 2008 19:47:00 GMT

Q: How do you know that a nation’s economy is going to the dogs?

A: When the illegal immigrants pack up and leave the country.

On Tuesday, February 12, the New York Times reported that “The signs of flight among Latino immigrants [in Arizona] are multiple: Families moving out of apartment complexes, schools reporting enrollment drops, business owners complaining about fewer clients.”

Economists, business people and immigration groups conclude that “the weakening economy coupled with recent curbs on illegal immigration are steering Hispanic immigrants out of the state.”

Some states like Arizona, Oklahoma, Colorado and Georgia have started cracking down hard on illegal immigrants, often with unintended consequences. Construction companies relying on Hispanic laborers can’t complete their jobs; the Chicago Tribune reported that in Tulsa, OK, “splintered trees, downed branches and piles of wood [are] still littering nearly every neighborhood of this sprawling city two months after a devastating ice storm,” and many businesses catering to Hispanics have been boarded up.

Some illegal workers have moved to other states with less tough laws, like Texas. But many, it seems, are simply going home. What gives?

The significance of the state of the U.S. economy is conveniently downplayed in the mainstream media. But looking at the overall picture, at least two of the sectors that have kept illegal immigrants happily occupied have all but dried up.

The housing crash has left the construction industry in shambles. Nationwide, new home construction was down 24.8% in 2007, the second-biggest annual decline on record, exceeded only by a 26% drop in 1980. Many smaller builders have gone belly-up, and even the large ones are hurting. Toll Brothers Inc., the nation’s largest builder of luxury homes, reported that fiscal first-quarter revenue fell 22% year-over-year. And in December 2007, the NAHB/Wells Fargo Housing Market Index – a measure of builder confidence – sank to its lowest level ever.

The restaurant business, which has traditionally employed low-skilled workers as dishwashers and bus boys, is struggling as well. The National Restaurant Association’s performance index dropped to 99 in November 2007, to its lowest level since 2003. Fitch Ratings, a global ratings agency, predicts that “the entire U.S. restaurant industry will be challenged in 2008 by the weakening economy, growing pressures on discretionary income and rising food and labor costs.”

While the Federal Reserve is still contemplating a possible recession, dozens of financial pundits have recently declared that we are already in a recession, and have been for a while. Last year alone, 1,408,852 people lost their jobs due to mass layoffs, real wages have been stagnant for years, and oil and food prices have skyrocketed.

According to figures from the U.S. Department of Commerce from June 2007, the price for oranges has risen 19.8% year over year. Eggs were 19.5% more expensive than in June 2006, frozen juices and fresh whole milk had gone up 17.7% and 13.3%, respectively. As anyone who has ever double checked official government numbers knows, those are usually somewhat beautified – so the real figures could be much worse.

But we should always be willing to give the government the benefit of the doubt. Come to think of it, it might actually be a stealthy but effective strategy by our Neocon handlers to deal with the tidal wave of illegal immigration: turn the U.S. into a third-world country, and even the poor Mexicans won’t bother to come here anymore.