Saturday, January 9, 2010

Why Am I So Scared?

The United States today has 7.3 million fewer jobs than it had in 25 months ago.  It lost another 85,000 jobs last month.  Forty-two percent of the total, over-16 American workforce is jobless.

Those are numbers.  Steve J., of Reading, PA, is a person.  He lost his job last year.  His wife found a minimum wage job.  His adult daughter, who is employed, moved back with her parents to help out.  They're meeting the mortgage payments -- barely -- but they still owe more than the house is worth.  "Christmas?"  Steve told a reporter.  "We couldn't afford gifts or a tree.  We were lucky we could keep the house heated -- sort of, 62 degrees. "  It was 18 degrees and snowing on Christmas Eve in Reading. Last night it was 11 degrees.  Steve ran out of heating oil and can't afford to buy more.  The emergency assistance number is constantly busy.  "Maybe they took it off the hook," Steve said.

Matt M. of Tampa, FL, is a person.  He was self-employed; ran a business that at its peak employed nine other workers.  Did well for seven years.  Had cash deposits and signed contracts for enough work to keep the wolf from the door when what he calls "the crash" hit.  Or so he thought.  One by one, then in clusters, people called to ask out of their contracts.  They begged to have their deposits refunded.  Legally, he didn't have to refund them.  "I was determined to stay in business," he said, "and I didn't want to create ill will by playing Scrooge." He gave them their money back. His wife found a job working from home as a telemarketer, which enables her to continue to care for her cancer-stricken mother.  Matt works odd jobs in the underground economy -- "anything people will pay cash for." On the second day of the new year his son's car was struck by a drunk driver running a red light at high speed.  He survived the crash but will need long term medical care.  The family has no health insurance.  The car was the one Matt used to drive to his odd jobs.

Bob H. of Albuquerque, NM did have health insurance, a retirement benefit.  After a long bout of breathing problems and other health issues, a specialist finally diagnosed his pulmonary hypertension.  It was life-threatening.  He ordered Bob to move immediately to a lower elevation -- as near sea level as possible. He prescribed costly, regular medication and told Bob to keep an auxiliary oxygen supply with him at all times.  He and his wife sold their  house for about 85% of what they had paid for it.  After the mortgage was satisfied, they had about $12,000 cash. Between December of 2007 and November of 2009, the modest investments that supplemented their Social Security income went up in smoke.  It cost them $4, 000 to move themselves and their belongings to a lower elevation.  The small home they're renting costs about half their Social Security income.  Most months they have to dip into their tiny cash reserve to cover essential living costs like food and utilities.  And when that's gone?  "Food stamps?" Bob wondered.  "The lottery?  I just don't know.  I never thought it would come down to this."

Even the employed are squeezed.  Small investors have quit investing.  The Wall Street journal reports that wages are stagnant and likely to remain so. The huge pool of unemployed workers, the Journal said, "helps employers keep wages from rising even as productivity -- output per hour of work -- soars."

Goldman Sachs, the alma mater of the U.S. treasury secretary and most of the other government financial policy makers, received $12 billion in bailout funds when the crisis hit the economy.  This year its pool of cash for executive bonuses is $20 billion.

Kappa Beta Phi, a secret and exclusive Wall Street club, inducted new members the other night at a posh banquet in the St. Regis hotel in Manhattan.  They sang song parodies.

One, sung by a fat cat in a nun's costume to the tune of a "Sound of Music" number, was about the Goldman Sachs CEO and top bonus-earner:

    "How do you solve a problem like Lloyd Blankfein?
    "How do you cap a bonus and keep it down?. . ."

It cracked 'em up at the St. Regis.  Steve, Matt and Bob aren't laughing.

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