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Allen
& Merri Kerr come from Paradise, CA to enjoy paradise here in the foothills. Our little enclave nestled in the woods
is what they call their little paradise.
Charlie & Nancy Dodson have been
visiting us since July '07. They have just qualified for thier second free night. Charlie thinks Oakstone Winery is the cat's
meow.
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TIDBITS & NITWITS
(This space is for whatever Daryl needs to ponder about.)
April 2011
TIDBITS: We’ve been told the economic crisis of 2008
was the worst since the 1930’s. If the TARP bill did not pass we’d face a bigger and maybe deeper Depression than
then, George W. Bush wrote in his book “Decision Points”. Less than six months after TARP President Obama came
before the American people stating if the Stimulus Package is not passed we’ll face economic catastrophe; Congress passed
a $787 BILLION bill that the President signed into law on February 17, 2009. Let’s see: February 17, 2009 was two years and 45 days ago (today is 4/411).
The March 2011 8.8% unemployment rate is higher than the February 2009 rate of 8.2% and a far cry higher
than the 6.6% rate in October of 2008 (that’s when TARP was signed into law). Between October 2008 and today the unemployment
rate was as high as 10.1% in October 2009. For all of 2010 the rate was well above 9.0% (the 12 month average was 9.64%).
True the recession started in December 2007 when the unemployment rate was 4.8%. So from December 2007
(the start of the recession) to March 2011 (almost two years after the NBER Committee stated the recession had ended in July
2009) the unemployment rate climbed 4.0%. The President states the Stimulus Package has worked so well that President Obama has announced today
(4/4/11) he is seeking his second term. He states his economic leadership has shown we are on the road to recovery and not
in a continuing recession, even though all the numbers prove otherwise. Since 1948 unemployment has averaged
5.7% as compared to today’s rate of 8.8%. The economy is growing at a 3.1% rate. Normal growth to maintain jobs growth
has to be about 5%. Let’s not even discuss the housing market, business loans, refinancing of personal and business
mortgages or the approximate $400 BILLION unspent Stimulus Package funds. (It’s good those funds are not spent, but
they are still lingering in the treasury and still available to be earmarked for some project, or whatever.) Yes, President Obama
did inherit a recession. Remember he was in Congress (A US Senator from 2005 until his election in November 2008) and he voted
for those budgets that created the deficit and the economic downturn of 2007. Has his two years and two months led to improving
the economy? NO! Comparing some of the other recessions of the past 100 years, the current economic
downturn is the second longest on record, second only to the Great Depression of the 1930s. TARP and the Stimulus Package
were to prevent a long deep economic downturn like the Depression. Those spending plans have NOT done
that, but a recovery surely could have been faster and people would be back to work: not losing their homes or closing their
businesses, if the Obama Administration had followed the proven plan of sustained economic growth that will come by strengthening
the private sector, not by strengthening government. The best way to do this is to reduce government spending, which crowds
out the private kind, and to enact long-term tax cuts. President Harding (The 1920-1921 Recession) practiced what he preached.
Regarding deflation, the Federal Reserve jacked up interest rates from 4.75% in January 1920 to 7% in June 1920, and held
this rate through … May of 1921. Harding slashed the federal budget from $18.5bn in 1919 to $6.4bn in 1920 all
the way down to $5.1bn in 1921. Meanwhile, the government actually ran surpluses during these years, allowing them to
pay down the debt by $300mm from 1920-21. The recovery took about 18 months. President Reagan cut taxes
in 1981 and slowed the growth of government spending; within 18 months the result was the beginning of a twenty year economic
expansion unparalleled in US history. NITWITS: We recently hosted volunteers for a business survey conducted in our area.
The El Dorado County Economic Development Director (The Director) and our local County Supervisor (The Supe) both attended.
After the volunteers came back from their fact finding missions we enjoyed lunch and a friendly discussion about what was
learned during the taking of the surveys. One of the issues mentioned by several businesses was the need for help in getting
funding to maintain or expand their operations. The Director stated he had developed a relationship with many lending intuitions. He will assist any of our
businesses in connecting them with the right lender for them. The Supe questioned him about the effectiveness
of being connected with a lender who requires a life story before they supply any information about what services they have
that might fit the needs of the business asking for assistance. I stated I have asked lenders to answer my questions before
I let them ask for my life history. My questions were simple enough, what were their loan interest rates and basic qualifying
requirements, to no avail. Both
The Supe and I explained to The Director we thought it was unnecessary for people to provide their life history if the lenders
didn’t have anything that would work for us. The problem is we can’t find out any of their information unless
we provide our life history. The Director basically sided with the lenders saying they need the information in order to lend
any funds or refinance. We both agreed with that fact, however, if the lender doesn’t have any program that works for
us why do we have to give our life history in order to find out that lender has nothing compatible for us? Can’t we
just ask for their information and let us decide if that works for us? I must be the NITWIT in this venture.
Daryl
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