With Friday's job report, the message is “We have turned the corner on the recession.” This reinforces my belief that in bad times people want to hear good news. There are some serious miscalculations here. A lot of the jobs that have been lost are not coming back; people will have to be retrained for new types of work. In the 1930’s we switched from an agrarian economy to a manufacturing one. The switch is happening again. We need computer skills to fit into the new world of Information Technology. The problem is trying to retrain those over the age of 45 with these new job skills.
Housing also seems to be picking up. It seems like savvy investors are picking up rental property. Think about that for one moment, if housing prices drop below what renters are paying for rent, why rent? Buy a house. So as housing prices decrease, the rental market goes to hell. In some places like Detroit Michigan or Helmet, California, home prices have hit $80,000, that’s the construction cost of the house with zero land value. The net result home builders disappear. $600 dollars a month would move you into a home. I hear Fannie and Freddie Blowin' In The Wind; get a free toaster with your purchase of a house.
Then we have state budgets and legislators on the road to nowhere. The recently elected New Jersey governor Chris Christie is starting to get the state moving in the right direction. Here is a Link worth watching, it's about 26 minutes . He has the right ideas. He knows what he’s doing, won’t get him re elected. Maybe some of the right people, to fix this mess, are getting elected.
And finally, public employee retirement plans are making the news. Taxpayers are beginning to realize the retirement benefits are a bit on the extravagant side. The state financing (nationwide) needed to keep these plans funded, are a couple of trillion dollars short, three to be exact (so far). It will be interesting to see where this money comes from.
If you are wealthy, you’re oblivious to today’s hard times. Some Indian father threw a $200,000 wedding in downtown San Diego yesterday. He even rented an elephant, see the picture below.
It kind of makes one wonder about the distribution of wealth in the world. Opulent consumption of this sort during hard times never sits well with the masses. The quote “Let them eat cake” comes to mind and we know how that turned out.