Economist: Why the Middle Class Is Declining - CNBC - Justin Menza - February 24, 2013 -
The American middle class is "hollowing out" as the U.S. economy fails to compete effectively in a globalized world, Harvard economist Michael Porter told CNBC's "Closing Bell" this week.
"America used to be a uniquely productive, low-cost place to do business," Porter said on Thursday. "We had efficient infrastructure. We had limited regulation. We believed in the market."
But bit-by-bit this position has eroded. Regulatory costs have gone up, Porters said, the legal system is more cumbersome, infrastructure is eroding and the country is falling behind on skills.
That means the many Americans do not have the skills needed to earn a decent living and for the first time in 50 or 60 years, incomes are stagnating and the middle class, which Porter called the bedrock of America, is "hollowing out." "Being an American doesn't mean that you're guaranteed a high wage," in the era of globalized competition, Porter said. "You have to be productive, and we have to create a very low-cost efficient place to do business and we've let all that slip in America." The country's budgetary problems are largely a symptom of this lost competitiveness and economic weakness. Without rising incomes and an improvement in the fundamental performance of the economy, there's been less tax revenue, he said. To offset declining incomes, the government has had to make promises to help pay for health care, retirement and housing, but the economy can't afford them because it isn't performing, according to the economist. America can return to competitiveness, Porter said, if the corporate tax code becomes more efficient, there's a sustainable budget compromise and the U.S. takes advantage of the shale revolution to move toward energy independence.
Which Tax Deductions Are Most Likely to Go? - CNBC - Mark Koba - February 24, 2013 -
... Congressional hearings have begun on the most well-known, and according to some experts, most likely to be reformed or eliminated. Among them: charitable deductions, deductions on home mortgage interest, the so called carried interest — the tax break for private equity and hedge fund managers — and limiting tax deductions on corporate profits. Loopholes and tax breaks cost the Treasury more than $1 trillion each year, according to government estimates. Among the biggest losses come from tax breaks for U.S. corporations — $114 billion — the mortgage interest deduction — an estimated $77 billion — and charitable donations — $38 billion. Each of the parties at risk are fighting back. Several charitable groups testified before Congress recently, saying that if their deduction is lowered or eliminated, people will stop giving. The housing industry — most specifically builders — say the mortgage interest deduction is necessary for the housing market to recover from its recession lows. Corporations say their U.S. tax rates are the highest in the world, at 35 percent. Hedge funds and private equity firms say part of their fees are based on risk, and therefore their tax rate — which was just raised with the fiscal cliff deal from 20 to 25 percent — should be treated like an investment instead of a salary, and therefore taxed at a different rate. (Read More: Home Builder Confidence Falls)
Why Do US Taxpayers Give the Big Banks a $83 Billion/Year Subsidy? - AgainstCronyCapitalism.org - Nick Sorrentino - February 22, 2013 - As the attached article explains, the banks deemed “too big to fail” get to borrow money at artificially low rates. Creditors know that if a TBTF bank gets into trouble that bank will always be bailed out by the government (taxpayer.) The TBTF designation, now codified in Dodd-Frank, is an implicit subsidy paid for by We the People. The below article argues that the big banks wouldn’t even be profitable if they did not enjoy the designation of bloated financial whale bombs. Additionally the TBTF subsidy puts smaller banks at a strong competitive disadvantage. Borrowing costs are comparatively higher for non-TBTF Tinytown Community Bank for instance, than for a behemoth like Bank of America. This means that over time more and more money moves from Main Street to the big banks. This is probably not the best thing for the country... (From Bloomberg) - The top five banks — JPMorgan, Bank of America Corp., Citigroup Inc., Wells Fargo & Co. and Goldman Sachs Group Inc. – - account for $64 billion of the total subsidy, an amount roughly equal to their typical annual profits (see tables for data on individual banks). In other words, the banks occupying the commanding heights of the U.S. financial industry — with almost $9 trillion in assets, more than half the size of the U.S. economy — would just about break even in the absence of corporate welfare. In large part, the profits they report are essentially transfers from taxpayers to their shareholders.
Economists Warn Fed Risks Losing Control Amid Budget Deficits - Bloomberg - Joshua Zumbrun - February 22, 2013 - Four economists, including a former Federal Reserve governor who has co-written research with Chairman Ben S. Bernanke, warned that losses from the central bank’s more than $3 trillion balance sheet could lead to the Fed losing control of monetary policy... The conclusion from economists, including Frederic Mishkin, a governor at the central bank from 2006 to 2008 and an academic collaborator with Bernanke before that, will be presented at the U.S. Monetary Policy Forum in New York. Their paper serves as a high-profile warning to an audience including Boston Fed President Eric Rosengren, Fed Governor Jerome Powell and St. Louis Fed President James Bullard. The central bank is currently purchasing $85 billion a month of Treasuries and mortgage-backed securities, following two previous rounds totaling $2.3 trillion, in an effort to lower an unemployment rate stuck near 7.9 percent. Once the economy strengthens, the central bank plans to unwind its balance sheet by raising interest rates and selling many of the assets acquired over the past four years... The conclusion from economists, including Frederic Mishkin, a governor at the central bank from 2006 to 2008 and an academic collaborator with Bernanke before that, will be presented at the U.S. Monetary Policy Forum in New York. Their paper serves as a high-profile warning to an audience including Boston Fed President Eric Rosengren, Fed Governor Jerome Powell and St. Louis Fed President James Bullard. The central bank is currently purchasing $85 billion a month of Treasuries and mortgage-backed securities, following two previous rounds totaling $2.3 trillion, in an effort to lower an unemployment rate stuck near 7.9 percent. Once the economy strengthens, the central bank plans to unwind its balance sheet by raising interest rates and selling many of the assets acquired over the past four years. The economists say that the Fed could incur substantial losses that might occur when U.S. deficits are still high and Congress and the White House have been unable to put fiscal policy on a sustainable trajectory. “This unfavorable fiscal arithmetic might tend to push the Fed toward delaying its exit from the extraordinary easing measures it has taken in recent years; it could even affect decisions this year about how much further to expand the Fed’s holdings of longer-term government securities,” the authors said. “The Fed could cut its effective drain on the Treasury significantly by putting off asset sales and delaying policy rate increases. But such a response would presumably feed rising inflation expectations.”
The Spending Crunch Is Official: "We Are Confident There Is An Issue With The Consumer" - Zero Hedge - Tyler Durden - February 20, 2013 - Think the Walmart "disastrous" sales memo was a one-off event, which net of Walmart's damage should be completely ignored (something the market has been perfectly happy to oblige with)? Then listen to a separate perspective on the US consumer, this time from a very different angle: that of Town Sports International which operates such gyms as New York Sports Club, and specifically its CEO David Gallagher, who in last night's conference call just confirmed what everyone knows: "As we moved into January membership trends were tracking to expectations in the first half of the month, but fell off track and did not meet our expectations in the second half of the month. We believe the driver of this was the rapid decline in consumer sentiment that has been reported and is connected to the reduction in net pay consumers earn given the changes in tax rates that went into effect in January."...
40 Ways That China Is Beating America - The End of the American Dream.com - Michael - February 10th, 2013 - China is wiping the floor with the United States on the global economic stage, and most Americans are so clueless that they have absolutely no idea what is happening. The number one global economic superpower is in an advanced state of decline, and the number two global economic superpower is becoming stronger with each passing day. Unless something truly dramatic happens, it is only a matter of time before China overtakes America and become the dominant economic force on the planet. In fact, China is already exercising economic superiority over the United States in a whole host of ways. China produces more goods than we do, China does more total trade in goods with the rest of the world than we do, China produces more cars than we do, China produces more gold than we do, China consumes more energy than we do, China produces more coal than we do and China produces more steel than we do. Every single year, we buy far more from them than they buy from us, and this has made them exceedingly wealthy. Our politicians regularly make trips over to China to beg them to lend us back some of the money that they have taken from us. Today, we owe China more than a trillion dollars and the Chinese are sitting on the biggest pile of foreign currency reserves that the world has ever seen. All of this wealth has fundamentally transformed the nation of China over the past couple of decades. Just check out the startling photographs of China from space in this article that show how China dramatically changed between 1992 and 2010. As China continues to become stronger and as America continues to become weaker, will our children some day wake up in a world where the Chinese are telling them what to do? China became the number one exporter of goods back in 2009, but now China has reached another milestone on the road to global economic dominance. When you total up all exports of goods and all imports of goods, China now conducts more total trade in goods with the rest of the globe than the United States does. China’s emerging role as the dominant player in global trade is shaking things up all over the planet. The following is a brief excerpt from a recent Bloomberg article…
20 Signs That The U.S. Economy Is Heading For Big Trouble In The Months Ahead - The Economic Collapse.com - Michael - February 20th, 2013 - Is the U.S. economy about to experience a major downturn? Unfortunately, there are a whole bunch of signs that economic activity in the United States is really slowing down right now. Freight volumes and freight expenditures are way down, consumer confidence has declined sharply, major retail chains all over America are closing hundreds of stores, and the "sequester" threatens to give the American people their first significant opportunity to experience what "austerity" tastes like. Gas prices are going up rapidly, corporate insiders are dumping massive amounts of stock and there are high profile corporate bankruptcies in the news almost every single day now. In many ways, what we are going through right now feels very similar to 2008 before the crash happened. Back then the warning signs of economic trouble were very obvious, but our politicians and the mainstream media insisted that everything was just fine, and the stock market was very much detached from reality. When the stock market did finally catch up with reality, it happened very, very rapidly. Sadly, most people do not appear to have learned any lessons from the crisis of 2008. Americans continue to rack up staggering amounts of debt, and Wall Street is more reckless than ever. As a society, we seem to have concluded that 2008 was just a temporary malfunction rather than an indication that our entire system was fundamentally flawed. In the end, we will pay a great price for our overconfidence and our recklessness. So what will the rest of 2013 bring? Hopefully the economy will remain stable for as long as possible, but right now things do not look particularly promising.
The Men Who Built America: Remembering The Gilded Age Part 1 - Zero Hedge - Tyler Durden February 21, 2013 - It is perhaps time to look back at what once was. In Part 1 of the 4 part History Channel series, a new war begins as out of the turmoil of the Civil War, America enters an age of enlightenment that will change the landscape of the country forever. The growth is driven by five insightful men who will change the world forever. John D. Rockefeller, Cornelius Vanderbilt, Andrew Carnegie, Henry Ford and J.P. Morgan rose from obscurity and in the process built modern America. Their names hang on street signs, are etched into buildings and are a part of the fabric of history. These men created the American Dream and were the engine of capitalism as they transformed everything they touched in building the oil, rail, steel, shipping, automobile and finance industries. Their paths crossed repeatedly as they elected presidents, set economic policies and influenced major events of the 50 most formative years this country has ever known. From the Civil War to the Great Depression and World War I, for better or worse, they led the way.
The Men Who Built America: Remembering The Gilded Age Part 2 - Zero Hedge - Tyler Durden - February 24, 2013 - Continuing to look back at what once was. Following Part 1's emergence
from the civil war and the age of enlightenment, In Part 2 of the 4
part History Channel series, America continues to recover from the Civil
War, undertaking the largest building phase of the country s history.
While much of the growth is driven by railroads and oil, it's built
using steel. From the Civil War to the Great Depression and World War I,
for better or worse; for richer or poorer, in ethical and societal
sickness or health; these five men - John D. Rockefeller, Cornelius
Vanderbilt, Andrew Carnegie, Henry Ford and J.P. Morgan - led the way.
Futurist Ray Kurzweil with Glenn Beck ~ Artificial Intelligence & Reverse-Engineering the Human Brain
Monday, February 25, 2013
Thursday, February 21, 2013
20130219 - Hickory City Council Video Presentation - Now Includes City's own audio presentation - HOO RAY
The Hound - Now we are up to a 3/4 check on Video Presentations of Council, because they are now putting out the audio of the meeting and the audio is excellent quality. Begs to ask why this wasn't happening 3 or 4 years ago, but they should be congratulated for finally making it to the first decade of the 21st century. Now we need to head on up to 2013 and get this done. It will be to everyone's benefit to do so.
This will give me part of my life back and I am very much appreciative of that. Hoo Ray, Hoo Ray, Hoo Ray. We will get the Newsletter about the City Council meeting out shortly to provide commentary on the proceedings of this meeting.
Wednesday, February 20, 2013
CEGs Hickory City Council Checklist - 2/19/2013
CEGs first 5 proposals for a more representative City Council
CEG's HDR Letter to the Editor - Unedited Version - from 10/10/12
✓ 1) Move time for citizens requesting to be heard to the top of the agenda at City council meetings. As of tonight February 19, 2012, we have accomplished this objective. The Council should be thanked for doing the right thing.
2) Demand that council members take conflict of interest matters more seriously. The Mayor did recuse himself at a City Council meeting a month ago. Once again the right thing to do and he is to be commended. We do need to make policies that will clean up this area going into the future.
1/2✓ 3)Record and broadcast City Council meetings via Charter Cable and the internet. The meetings, as those who follow the Hound understand, are already available on Youtube. You will see when I get the Broadcast of this February 19th meeting up that the City Manager and some of the Council wanted to pretend and belittle these broadcasts of the meetings, it only made them look silly. You have to weigh desires with reality. Does the public care about a Hollywood production? And is a Hollywood production possible and feasible?
I have only been recording the meetings to force the issue. I am not doing this for ego sake. I was asked to do this by others and they provided the support, because they want this issue moved forward. This is about trust and accountability as Cliff Moone said on this night and I have said before. This isn't about vanity. This should have happened years ago and a desire to fly under the radar is the only reason why it hasn't.
It is a good first step that the audio of the meetings along with Power Point presentations are going up, as has been put forth on the Hound for a while now. I haven't wanted to have a relation with the City, at this point, to go through the steps to procure these Power Points, so I have taken the pictures and post the photos for you. I see how the Hickory Daily Record's relationship with the city can compromise their coverage and why would I want to follow suit? I am not saying this to call out the HDR. I am only pointing to the obvious. In yesterday's paper, the HDR reported some cost numbers the City had put forward related to Video. There were no questions asked to verify the authenticity of those cost numbers, so those numbers are meaningless. They seem to have been pulled out of the air in much the same way that the numbers were pulled out of the air about the Structure on Union Square. And the HDR didn't question those numbers either. We won't be playing that game.
Video is obviously nowhere near as hard as they are making it out to be. The City Manager and a few on Council wanted to talk about the quality of such video presentations. They seemed to insinuate that I am using a flip phone and my quality is cheesy. I have attempted to be inconspicuous and disturb the proceedings as little as possible and still get the audience the information and a feel for the meetings.
The City Manager and Council want to monopolize the presentation of information to the people. The information that belongs to the people, not Mick Berry or Jill Patton. The fact is that I am using a Sony Bloggie High Definition Camera capable of 1920x1080p broadcasts at 30 frames per second. I have to reduce the quality through rendering to 720x480p at 24 frames per second to reduce the size of the files for upload onto Youtube. Not only to reduce upload time, but also to reduce download time. These cameras are 12 megapixel quality. If I want to shoot somebody's nosehair, I have that capability. The fact of the matter is that this video rendering still is a 500 megabyte file for 1 hours worth of video and the upload of that one hour's video takes approximately three hours. The issues involve bandwidth and upload speed. Maybe, as I have stated before, the City ought to be working on that 21st century infrastructure issue.
It was obvious to anyone other than a layman that the Council didn't have a clue about what they were talking about pertaining to this issue. We hope, going forward, that they will evolve on this issue as they did on the Citizen Input issue.
✓ 4) Restore citizen’s right to request that items be removed from the consent agenda. As of tonight February 19, 2012, we have accomplished this objective. The Council should be thanked for doing the right thing. All of the handwringing over this issue last May, only to come full circle back to where we started. If money is time and time is money, then let's quit wasting time and get this community moving forward again.
CEG's HDR Letter to the Editor - Unedited Version - from 10/10/12
✓ 1) Move time for citizens requesting to be heard to the top of the agenda at City council meetings. As of tonight February 19, 2012, we have accomplished this objective. The Council should be thanked for doing the right thing.
2) Demand that council members take conflict of interest matters more seriously. The Mayor did recuse himself at a City Council meeting a month ago. Once again the right thing to do and he is to be commended. We do need to make policies that will clean up this area going into the future.
1/2✓ 3)Record and broadcast City Council meetings via Charter Cable and the internet. The meetings, as those who follow the Hound understand, are already available on Youtube. You will see when I get the Broadcast of this February 19th meeting up that the City Manager and some of the Council wanted to pretend and belittle these broadcasts of the meetings, it only made them look silly. You have to weigh desires with reality. Does the public care about a Hollywood production? And is a Hollywood production possible and feasible?
I have only been recording the meetings to force the issue. I am not doing this for ego sake. I was asked to do this by others and they provided the support, because they want this issue moved forward. This is about trust and accountability as Cliff Moone said on this night and I have said before. This isn't about vanity. This should have happened years ago and a desire to fly under the radar is the only reason why it hasn't.
It is a good first step that the audio of the meetings along with Power Point presentations are going up, as has been put forth on the Hound for a while now. I haven't wanted to have a relation with the City, at this point, to go through the steps to procure these Power Points, so I have taken the pictures and post the photos for you. I see how the Hickory Daily Record's relationship with the city can compromise their coverage and why would I want to follow suit? I am not saying this to call out the HDR. I am only pointing to the obvious. In yesterday's paper, the HDR reported some cost numbers the City had put forward related to Video. There were no questions asked to verify the authenticity of those cost numbers, so those numbers are meaningless. They seem to have been pulled out of the air in much the same way that the numbers were pulled out of the air about the Structure on Union Square. And the HDR didn't question those numbers either. We won't be playing that game.
Video is obviously nowhere near as hard as they are making it out to be. The City Manager and a few on Council wanted to talk about the quality of such video presentations. They seemed to insinuate that I am using a flip phone and my quality is cheesy. I have attempted to be inconspicuous and disturb the proceedings as little as possible and still get the audience the information and a feel for the meetings.
The City Manager and Council want to monopolize the presentation of information to the people. The information that belongs to the people, not Mick Berry or Jill Patton. The fact is that I am using a Sony Bloggie High Definition Camera capable of 1920x1080p broadcasts at 30 frames per second. I have to reduce the quality through rendering to 720x480p at 24 frames per second to reduce the size of the files for upload onto Youtube. Not only to reduce upload time, but also to reduce download time. These cameras are 12 megapixel quality. If I want to shoot somebody's nosehair, I have that capability. The fact of the matter is that this video rendering still is a 500 megabyte file for 1 hours worth of video and the upload of that one hour's video takes approximately three hours. The issues involve bandwidth and upload speed. Maybe, as I have stated before, the City ought to be working on that 21st century infrastructure issue.
It was obvious to anyone other than a layman that the Council didn't have a clue about what they were talking about pertaining to this issue. We hope, going forward, that they will evolve on this issue as they did on the Citizen Input issue.
✓ 4) Restore citizen’s right to request that items be removed from the consent agenda. As of tonight February 19, 2012, we have accomplished this objective. The Council should be thanked for doing the right thing. All of the handwringing over this issue last May, only to come full circle back to where we started. If money is time and time is money, then let's quit wasting time and get this community moving forward again.
5) Make “working agendas” available by Wednesday of each week before a City council meeting to give citizens time to be aware and prepare for meetings. This should happen also. Most people aren't going to look at the Agenda when it comes out on Friday evening. They have worked all week and they are looking to get home and chill out over the weekend. They are more worried about Friday dinner than a City Council Agenda. They say that Corporate Entities like to put out information on Friday Evenings for this very reason, especially negative information; because they know that people won't do anything over the weekend.
*** The City Council Meeting lasted for 3 hours last night. It will take a couple hours to get it ready and several hours to upload it. I will upload it in sections with the Newsletter coming out the day after the video is out. Thank You for your patience and your support.
Sunday, February 17, 2013
Economic Stories of Relevance in Today's World -- February 17, 2013
Retail sales growth slows as higher taxes kick in - Reuters - By Lucia Mutikani - February 13, 2013 - Retail sales barely rose in January as tax increases and higher gasoline prices restrained spending, setting up the economy for only modest growth in the first quarter. The Commerce Department said on Wednesday retail sales edged up 0.1 percent after a 0.5 percent rise in December. The small increase suggested the expiration of a 2 percent payroll tax cut on January 1 and higher tax rates for wealthier Americans were hurting the economy. Still, economists said consumer spending was unlikely to buckle given rising home values, moderate job growth and rallying stock market prices. Stocks have surged in recent months partly on stronger than expected corporate earnings... Consumer spending growth is expected to pull back from the fourth-quarter's clip as households adjust to smaller paychecks and gasoline prices march higher. Prices at the pump have increased 30 cents a gallon so far this year. Estimates for consumer spending growth in the first quarter currently range between 0.7 percent and 1.8 percent. While some economists were encouraged that consumers had maintained purchases despite a reduction in their disposable incomes, they cautioned sales could remain weak over the next months. "By no means are we completely out of the woods when it comes to the impact of higher taxes," said Michael Feroli, an economist at JPMorgan in New York. "Evidence from past episodes suggests it could take up to two quarters for spending to fully adjust to new tax realities." A softer pace of consumer spending is expected to limit GDP growth to a 1.8 percent rate this quarter, according to a Reuters poll of economists. For the year as a whole, economists expect growth of just 2.3 percent.
Mortimer Zuckerman: By Any Measure, the Jobs Disaster Continues - Wall Street Journal through Zero Hedge - - February 15, 2013 - Jobs! President Obama has set a record. In his speech to Congress on Tuesday, he uttered the word "jobs" more than in any of his previous four State of the Union addresses. His 45 mentions were more than double the references to any of the other policy ambitions encapsulated in his speech by such words as health, education, immigration, guns, deficit, debt, energy, climate, economy, Afghanistan, wage, spend or tax (the runner-up). If only the president's record on unemployment were as good. After four years America remains in a jobs depression as great as the Great Depression. But the crisis isn't seen in that light because the country isn't confronted daily by scenes of despair like the 1930s photographs of bread lines and soup kitchens and thousands of men (very few women then) waiting all day outside a factory in a forlorn quest for work. But the jobless are still in the millions across the land, little changed in their total since the 1930s: 12.3 million today officially fully unemployed compared with 12.8 million in 1933 at the depth of the Depression. Yes, the U.S. population is much larger now, but 12 million out of work still means 12 million lives devastated. And that number masks the true vastness of the modern disaster. The jobless today are much less visible than they were in the 1930s because relief is organized differently. Today in the "recovery," the millions are being assisted, out of sight, by government checks, unemployment checks, Social Security disability checks and food stamps. More than 48 million Americans are in the food-stamp program—an almost incredible record. That is 15% of the total population compared with the 7.9% participation in food stamps from 1970-2000. Then there are the more than 11 million Americans who are collecting Social Security checks to compensate for disability, also a record. Half have signed on since President Obama came to office. In 1992, there was one person on disability for every 35 workers; today it is one for every 16.
U.S. Stocks Fall as Wal-Mart Tumbles Amid Economic Data - Bloomberg BusinessWeek - Lu Wang and Leslie Picker - February 15, 2013 - The Standard & Poor’s 500 Index fell, snapping three days of gains, as Wal-Mart Stores Inc. tumbled and investors weighed economic data. Wal-Mart slipped 2.2 percent amid the worst sales start of a month in seven years. Agilent Technologies Inc. fell 5.2 percent after cutting its full-year forecast. CBS Corp. climbed 4 percent after forecasting growth in licensing fees and an increase in its share buybacks. MeadWestvaco Corp. rallied 13 percent after Nelson Peltz’s Trian Fund Management LP took a stake in the packaging company. The S&P 500 fell 0.1 percent to 1,519.79 at 4 p.m. in New York. The Dow Jones Industrial Average gained 8.37 points, or 0.1 percent, to 13,981.76. About 6.7 billion shares traded hands on U.S. exchanges, 9.7 percent above the three-month average, as options on stocks, equity indexes and exchange-traded products were set to expire. The market is closed Feb. 18 for Presidents Day. Wal-Mart’s sales slowdown “is a sign that the consumer is not as ready to come back as maybe Wall Street was hoping,” Terry L. Morris, who helps oversee about $2.6 billion at Wyomissing, Pennsylvania-based National Penn Investors Trust Co., said by phone. “Maybe the market is a little ahead of itself at assuming better growth than what’s actually there.” ... Wal-Mart, the world’s largest retailer, dropped $1.52 to $69.30. Sales slumped this month as payroll-tax increases hit shoppers already battling a slow economy, according to internal e-mails obtained by Bloomberg News. The numbers “are a total disaster,” Jerry Murray, Wal-Mart’s vice president of finance and logistics, said in a Feb. 12 e-mail to other executives.
Dying Dollar? Why US Currency Is in Danger - CNBC through Yahoo - Jeff Cox – February 14, 2013 - The U.S dollar is shrinking as a percentage of the world's currency supply, raising concerns that the greenback is about to see its long run as the world's premier denomination come to an end. When compared to its peers, the dollar has drifted to a 15-year low, according to the International Monetary Fund, indicating that more countries are willing to use other currencies to do business... "If the dollar loses status as the world's most reliable currency the United States will lose the right to print money to pay its debt. It will be forced to pay this debt," Bove said. "The ratings agencies are already arguing that the government's debt may be too highly rated. Plus, the United States Congress, in both its houses, as well as the president are demonstrating a total lack of fiscal credibility." Bove is not the only one sounding the reserve currency alarm, though the issue has fallen off the front pages as hopes for a sustained U.S. recovery have taken hold and the stock market has surged to near-record highs... The dollar's seemingly precarious status is why Pento remains bullish on gold and believes the dollar's demise as the premier reserve currency could end even sooner than Bove predicts -- perhaps by 2015.
"Five to 10 years -- that would be an outlier," he said. "I would say 2015, 2016, that would be the time when it becomes a particularly salient issue. When we're spending 30 to 50 percent of our revenue on debt service payments, we enter into a bond market crisis. The dollar starts to drop along with bond prices. That would set off the whole thing."
Stop Freaking Out About The Sequester - Business Insider - James Pethokoukis, American Enterprise Institute - February 15, 2013 - he past four years have seen a level of US government spending and debt unmatched outside of World War Two. The early 1980s period is the only contender. From 2009-2012, spending as a share of output averaged 24.4%. During that same period, annual budget deficits averaged 9.1% of GDP. From 1982-1985, federal spending averaged 22.9% of output, annual budget deficits 4.9%. Yet despite all that spending and debt, the US has actually been experiencing a period of sharp fiscal consolidation since the end of the Great Recession (reflected in the above chart). Economist Mike Darda of MKM Partners:
Despite a widely held view to the contrary, there has been a passive fiscal tightening under way for three years in the U.S. Although the federal spending/GDP ratio exploded during the recession, it peaked near the business cycle trough in mid-2009 and began to recede in 2010. There has been no net growth in total federal expenditures since mid-2010. As a result, the U.S. fiscal deficit has fallen to about 6.5% of GDP from a peak of 10.4% in late 2009.
America's financial downfall: Citizens now desperately raiding 401(k) plans to pay bills long before retirement - Natural News.com - JD Hayes - February 17, 2013 - Is chronic, slow economic growth and rising poverty the new normal for America and Americans? Unfortunately, for an increasing number of people, the answer is yes. According to recent reports, a large and growing portion of American workers who are having trouble making ends meet because of rising costs are being forced to raid their retirement accounts for non-retirement needs, "raising broad questions about the effectiveness of one of the most important savings vehicles for old age," The Boston Globe said. In fact, more than one in four - a staggering 25 percent of workers - with 401(k) and similar retirement savings accounts are now using them to pay current bills, new data indicates. The monetary figure is alarming: A quarter of the $293 billion deposited in such accounts each year is now being drained via loans, withdrawals and out-right cash-outs, "undermining already shaky retirement security for millions of Americans," the paper said.
The Dangerous Partnership Between Big Business and Government - againstcronycapitalism.org - February 14, 2013 - It looks like people are getting hip to how insidious and incestuous crony capitalism is. Big business and big government work hand in glove. From GE to GM to Goldman Sachs to Bank of America to Berkshire Hathaway to Monsanto to Barr Labs everyone is feeding at the taxpayer trough. Add in the giant media conglomerations and one has an unholy alliance which would make Darth Vader proud. “Come to the dark side, big business. We shall rule the universe together.”...
Fewer bees a threat to world's almond supply - USA Today - February 16, 2013 - In an almond orchard in California's Central Valley, bee inspector Neil Trent pried open a buzzing hive and pulled out a frame to see if it was at least two-thirds covered with bees. Trent has hopped from orchard to orchard this month, making sure enough bees were in each hive provided by beekeepers. Not enough bees covering a frame indicates an unhealthy hive — and fewer working bees to pollinate the almond bloom, which starts next week across hundreds of thousands of acres (hectares) stretching from Red Bluff to Bakersfield. "The bloom will come and go quickly," said Trent, who works for the Bakersfield-based bee broker Scientific Ag Co. "The question is: Will the almond seeds get set? It depends if you have enough of a workforce of bees." That has growers concerned as nomadic beekeepers from across the country converge on the state with their semi-trucks, delivering billions of bees to the orchards for the annual pollination. Most almond trees depend on bees to transfer pollen from the flower of one tree variety to the flower of another variety before fertilization, which leads to the development of seeds... Since it was recognized in 2006, colony collapse disorder has destroyed colonies at a rate of about 30% a year, according to the U.S. Department of Agriculture. Before that, losses were about 15% a year from pests and diseases. No one has determined its cause, but most researchers point to a combination of factors, including pesticide contamination, poor nutrition and bee diseases.
This year, experts say, the die-off has been as high as 40% to 50% for some beekeepers. "We have smaller populations in the hives and higher winter losses," said Eric Mussen, a bee specialist at the entomology department of University of California, Davis. "Bees across the country are not in as good a shape as last year. When you stress them far enough, the bees just give in."
Mortimer Zuckerman: By Any Measure, the Jobs Disaster Continues - Wall Street Journal through Zero Hedge - - February 15, 2013 - Jobs! President Obama has set a record. In his speech to Congress on Tuesday, he uttered the word "jobs" more than in any of his previous four State of the Union addresses. His 45 mentions were more than double the references to any of the other policy ambitions encapsulated in his speech by such words as health, education, immigration, guns, deficit, debt, energy, climate, economy, Afghanistan, wage, spend or tax (the runner-up). If only the president's record on unemployment were as good. After four years America remains in a jobs depression as great as the Great Depression. But the crisis isn't seen in that light because the country isn't confronted daily by scenes of despair like the 1930s photographs of bread lines and soup kitchens and thousands of men (very few women then) waiting all day outside a factory in a forlorn quest for work. But the jobless are still in the millions across the land, little changed in their total since the 1930s: 12.3 million today officially fully unemployed compared with 12.8 million in 1933 at the depth of the Depression. Yes, the U.S. population is much larger now, but 12 million out of work still means 12 million lives devastated. And that number masks the true vastness of the modern disaster. The jobless today are much less visible than they were in the 1930s because relief is organized differently. Today in the "recovery," the millions are being assisted, out of sight, by government checks, unemployment checks, Social Security disability checks and food stamps. More than 48 million Americans are in the food-stamp program—an almost incredible record. That is 15% of the total population compared with the 7.9% participation in food stamps from 1970-2000. Then there are the more than 11 million Americans who are collecting Social Security checks to compensate for disability, also a record. Half have signed on since President Obama came to office. In 1992, there was one person on disability for every 35 workers; today it is one for every 16.
U.S. Stocks Fall as Wal-Mart Tumbles Amid Economic Data - Bloomberg BusinessWeek - Lu Wang and Leslie Picker - February 15, 2013 - The Standard & Poor’s 500 Index fell, snapping three days of gains, as Wal-Mart Stores Inc. tumbled and investors weighed economic data. Wal-Mart slipped 2.2 percent amid the worst sales start of a month in seven years. Agilent Technologies Inc. fell 5.2 percent after cutting its full-year forecast. CBS Corp. climbed 4 percent after forecasting growth in licensing fees and an increase in its share buybacks. MeadWestvaco Corp. rallied 13 percent after Nelson Peltz’s Trian Fund Management LP took a stake in the packaging company. The S&P 500 fell 0.1 percent to 1,519.79 at 4 p.m. in New York. The Dow Jones Industrial Average gained 8.37 points, or 0.1 percent, to 13,981.76. About 6.7 billion shares traded hands on U.S. exchanges, 9.7 percent above the three-month average, as options on stocks, equity indexes and exchange-traded products were set to expire. The market is closed Feb. 18 for Presidents Day. Wal-Mart’s sales slowdown “is a sign that the consumer is not as ready to come back as maybe Wall Street was hoping,” Terry L. Morris, who helps oversee about $2.6 billion at Wyomissing, Pennsylvania-based National Penn Investors Trust Co., said by phone. “Maybe the market is a little ahead of itself at assuming better growth than what’s actually there.” ... Wal-Mart, the world’s largest retailer, dropped $1.52 to $69.30. Sales slumped this month as payroll-tax increases hit shoppers already battling a slow economy, according to internal e-mails obtained by Bloomberg News. The numbers “are a total disaster,” Jerry Murray, Wal-Mart’s vice president of finance and logistics, said in a Feb. 12 e-mail to other executives.
Dying Dollar? Why US Currency Is in Danger - CNBC through Yahoo - Jeff Cox – February 14, 2013 - The U.S dollar is shrinking as a percentage of the world's currency supply, raising concerns that the greenback is about to see its long run as the world's premier denomination come to an end. When compared to its peers, the dollar has drifted to a 15-year low, according to the International Monetary Fund, indicating that more countries are willing to use other currencies to do business... "If the dollar loses status as the world's most reliable currency the United States will lose the right to print money to pay its debt. It will be forced to pay this debt," Bove said. "The ratings agencies are already arguing that the government's debt may be too highly rated. Plus, the United States Congress, in both its houses, as well as the president are demonstrating a total lack of fiscal credibility." Bove is not the only one sounding the reserve currency alarm, though the issue has fallen off the front pages as hopes for a sustained U.S. recovery have taken hold and the stock market has surged to near-record highs... The dollar's seemingly precarious status is why Pento remains bullish on gold and believes the dollar's demise as the premier reserve currency could end even sooner than Bove predicts -- perhaps by 2015.
"Five to 10 years -- that would be an outlier," he said. "I would say 2015, 2016, that would be the time when it becomes a particularly salient issue. When we're spending 30 to 50 percent of our revenue on debt service payments, we enter into a bond market crisis. The dollar starts to drop along with bond prices. That would set off the whole thing."
Stop Freaking Out About The Sequester - Business Insider - James Pethokoukis, American Enterprise Institute - February 15, 2013 - he past four years have seen a level of US government spending and debt unmatched outside of World War Two. The early 1980s period is the only contender. From 2009-2012, spending as a share of output averaged 24.4%. During that same period, annual budget deficits averaged 9.1% of GDP. From 1982-1985, federal spending averaged 22.9% of output, annual budget deficits 4.9%. Yet despite all that spending and debt, the US has actually been experiencing a period of sharp fiscal consolidation since the end of the Great Recession (reflected in the above chart). Economist Mike Darda of MKM Partners:
Despite a widely held view to the contrary, there has been a passive fiscal tightening under way for three years in the U.S. Although the federal spending/GDP ratio exploded during the recession, it peaked near the business cycle trough in mid-2009 and began to recede in 2010. There has been no net growth in total federal expenditures since mid-2010. As a result, the U.S. fiscal deficit has fallen to about 6.5% of GDP from a peak of 10.4% in late 2009.
America's financial downfall: Citizens now desperately raiding 401(k) plans to pay bills long before retirement - Natural News.com - JD Hayes - February 17, 2013 - Is chronic, slow economic growth and rising poverty the new normal for America and Americans? Unfortunately, for an increasing number of people, the answer is yes. According to recent reports, a large and growing portion of American workers who are having trouble making ends meet because of rising costs are being forced to raid their retirement accounts for non-retirement needs, "raising broad questions about the effectiveness of one of the most important savings vehicles for old age," The Boston Globe said. In fact, more than one in four - a staggering 25 percent of workers - with 401(k) and similar retirement savings accounts are now using them to pay current bills, new data indicates. The monetary figure is alarming: A quarter of the $293 billion deposited in such accounts each year is now being drained via loans, withdrawals and out-right cash-outs, "undermining already shaky retirement security for millions of Americans," the paper said.
The Dangerous Partnership Between Big Business and Government - againstcronycapitalism.org - February 14, 2013 - It looks like people are getting hip to how insidious and incestuous crony capitalism is. Big business and big government work hand in glove. From GE to GM to Goldman Sachs to Bank of America to Berkshire Hathaway to Monsanto to Barr Labs everyone is feeding at the taxpayer trough. Add in the giant media conglomerations and one has an unholy alliance which would make Darth Vader proud. “Come to the dark side, big business. We shall rule the universe together.”...
Fewer bees a threat to world's almond supply - USA Today - February 16, 2013 - In an almond orchard in California's Central Valley, bee inspector Neil Trent pried open a buzzing hive and pulled out a frame to see if it was at least two-thirds covered with bees. Trent has hopped from orchard to orchard this month, making sure enough bees were in each hive provided by beekeepers. Not enough bees covering a frame indicates an unhealthy hive — and fewer working bees to pollinate the almond bloom, which starts next week across hundreds of thousands of acres (hectares) stretching from Red Bluff to Bakersfield. "The bloom will come and go quickly," said Trent, who works for the Bakersfield-based bee broker Scientific Ag Co. "The question is: Will the almond seeds get set? It depends if you have enough of a workforce of bees." That has growers concerned as nomadic beekeepers from across the country converge on the state with their semi-trucks, delivering billions of bees to the orchards for the annual pollination. Most almond trees depend on bees to transfer pollen from the flower of one tree variety to the flower of another variety before fertilization, which leads to the development of seeds... Since it was recognized in 2006, colony collapse disorder has destroyed colonies at a rate of about 30% a year, according to the U.S. Department of Agriculture. Before that, losses were about 15% a year from pests and diseases. No one has determined its cause, but most researchers point to a combination of factors, including pesticide contamination, poor nutrition and bee diseases.
This year, experts say, the die-off has been as high as 40% to 50% for some beekeepers. "We have smaller populations in the hives and higher winter losses," said Eric Mussen, a bee specialist at the entomology department of University of California, Davis. "Bees across the country are not in as good a shape as last year. When you stress them far enough, the bees just give in."
Stefan Molyneux
Wednesday, February 13, 2013
The State of Hickory 2013
Survival
Here we are for the fifth consecutive year attempting to characterize where Hickory's Economy and Culture are at moving through the year 2013. Once again we look at where we have been and where the trends show us heading. I have spent the past year speaking with people from across the cultural and socio-economic strata of our area and I will relate to you the collective story that comes forward from my perspective.
This past year was another year of stagnation in this community. The economy relatively did not grow in anything other than an anecdotal way.. Sure there have been a few businesses that moved to the area, but for every business venture created there have been an equal number or more that are no longer with us.
It seems that the new types of businesses that have come into existence in our community are the "Thrift" types of businesses. I am not saying that this is good or bad. I am just pointing out that there are many businesses that sell second hand, close out, overstocked or consignment goods in our community. They have always been here, but they are prevalent in the community to a greater degree than ever. Why have we seen a proliferation of such businesses?
In the current economy people are obviously looking to cut out waste, cut costs, and stretch dollars. Not too long ago people would throw possessions away without a second thought. Now people will look to sell items/assets that they no longer need and take the money obtained to buy things that they currently need. People are being forced to take a long look at their finances and decide what are necessities and what are extras.
Such a mindset might be wise in the long run, but it does not bode well for the short term prospects of an economy. As many of you know, I work as a Chef. During the Boom years people threw Grand Parties at my Aunt's Restaurant and functions we catered to. Whether Private or Corporate Affairs, people asked for the finest foods to be served in the finest settings under the finest of circumstances. It wasn't unusual for people to spend thousands of dollars on a party. Those types of extravaganzas have died out for the most part in this community. They were actually one of the first victims of this downturn.
As this community has aged what we have seen in Restaurant and Hospitality is more older people sharing or ordering half portions. Customers demand even greater service, but ticket/cover averages are way down. In the restaurant business, we are seeing people working harder to try to maintain income at the same time that costs have sky rocketed. I am sure that this is the same in most businesses and this is not an optimistic climate. It is about hanging on. It is about Survival. What is most stressful is to have the feeling that the worst is yet to come.
The Calm before the Storm
Have you ever been in a Hurricane? I have been in a couple.
I'm not talking about sitting hundreds of miles inland. I am talking about being a mile or so from the shoreline. You see the thing forming out in the Atlantic and it starts creeping your way. You can't get all distraught about it, but you have to pay attention. You have to remain vigilant. It can turn away, but there comes a point where you know that you are going to have to deal with it. You'll have to batten down and make sure you have provisions. You'll have people fretting like it is the end of the world and others acting like it's just going to be a shower. There is always a surreal anticipation that accompanies every storm.
Much like those Hurricanes, there seems to be an eerie calm in this community. It's like living in a different dimension. The world seems to go about it's business as if things are OK while you can see and sense that they aren't. Eventually, Interest Rates will have to Rise and when they do the Federal Government will not be able to service the interest on the $16 trillion (and growing by leaps and bounds) debt and will be forced to accelerate the money printing or go ahead and default, which will mean the end of the current dollar. Whichever happens, you will understand that the complacency that has gone on for years cannot be sustained on this mirage. A million times Zero Equals?
In this community, we have acted as though if we just don't make any substantial expenditures, then everything will work out when the economy turns around. What people have taken for granted is that this is a normal business cycle and eventually it will turn around. I am going to tell you. and I have told you for years, this is not normal... this is the new normal. You can cut your costs to zero, and we are to the point of cutting into the bone, but it doesn't mean you are going to make a penny to save a penny. In order to grow an economy you have to invest in it. Where do you invest? You invest in real people. You invest in the middle class.
The community isn't making anything off of the investments it has sitting in T-Bills and other Money Market instruments. As a matter of fact much of this money is being used against us. It is being utilized by the hyenas on Wall Street to off shore our jobs and build up China's economy and this is only exacerbated by the Federal Government's debt to China. Go on the internet and look at the Financial Capitals in China (Shanghai and Hong Kong) or the Middle East (Dubai). Go look at the videos. You see 100 times the development there that you do in any of the American cities. Check out the modern structures they are building off of the debt of our economy.
My cousin lives in South Charlotte. I hear about Charlotte's problems. In the couple times I have had a chance to get to Charlotte over the last year, it is easy to see that it is continuing to grow. New projects are happening currently even if not at the pace they were in the '90s and '00s. The key is that they have continued to take ownership of their economy and they are not complacent. It is called Grow or Die... Move Forward or Die.
And/Both
I can see the realities as well as anyone. There is currently no velocity to our local economy. This malaise has fed off of itself. Our local economy is devouring itself. The reality is that income is stagnant, but there is inflation in the pipeline. As a community we need to help people understand the necessity to hedge against the realities of inflation, while preparing and attuning themselves towards opportunities.
To hedge against the current economic realities, which will in the aggregate only get worse, we need to lighten the load and become as mobile as possible. If you can voluntarily sell an asset today, then you might get something out of it. If you don't have the income to pay your bills and you find yourself in a bind; you might just be forced to liquidate that asset in the future and you will get a lot less, to nothing, for it. Also, in an inflationary environment that asset is going to lose value compared to the currency, especially if it isn't a necessity. Having no major debt will increase your quality of life. You can take a load off your shoulders by reducing expenses. If you are having a tough time meeting your mortgage payments and it is causing you anxiety, then you should try to sell your house. If you can't sell it, then there is nothing wrong with walking away from it. There is no reason to be forced into playing a losing hand.
By the same token, I believe that one of the major reasons you should stay out of debt to become more mobile is that you might want to leave this community. If the people at the top of the food chain in Hickory aren't willing to reinvest in their ecosystem, then it is time to get out of their way and let them have it. That is what the young people (the millennials) are doing. As I have pointed to on this blog, the younger generations have chosen to go where the money is. They don't seem to care about having possessions that weigh them down or to live in houses and have mortgages that weigh them down. If they don't like it here, they are more than willing to go there. Maybe there is a lot to learn from that paradigm. You don't have to accept the Race to the Bottom. You don't have to accept failure.
Failure
I understood at a young age that no one was going to help me.... as a matter of fact people were going to stand in my way and be impediments towards my success... That if I fail it isn't on them, It is on me, because part of my task is to move these impediments out of the way.
You have people in this life that actually make an effort and then you have impediments. These people who impede progress don't understand the obstacles that they create. They believe that they are operating with the best of intentions. They believe that they are seeking the greater good... what will be the best result for the most people. But, the reality is that they are living in denial. God determines what is best for the greater good... not any man.
Non-performance is the very definition of failure. We have had a non-performing local economy for more than a decade. I think most people will admit the realities of the local economy. The only time you hear about sunshine and lollipops is when some of the local elected officials, bureaucrats, and marketing gurus want to put a happy face on everything. Call it issues, problems, or challenges, but the reality is the same thing and semantics isn't going to change the cold hard reality.
The frustrations of many in this community come from the fact that they bring forward ideas and constantly and summarily the ideas are shot down by the local entrenched establishment. This year we came forward with the Referendum on Ward specific voting and we lost, because the establishment rallied their mind-numbed minion through what amounted to be scare tactics and ignorant innuendo. It is what it is. You learn and move forward.
...And the South side of the City of Hickory continues to fall apart. Last year I talked about actions speaking louder than words. This year we see that Actions have spoken louder than words. It is more than obvious after five years that none of the local establishment is going to do anything to uplift the areas of Hickory that have fallen on hard times. They are stuck on a notion that this will happen naturally... Some Day.
We are not going to see policies directed towards these areas of need. No capital is coming from altruistic principles. I ask where is the fundamental pride in this community? Pride through action and not words. The fundamental pride that it took to build this community and took to maintain this community for over 100 years!!!
Accepting Failure
I have heard it said by people of the greatest means in our community. Most of them tell their children that they shouldn't look to come back here after they graduate from college and the only kids that do come back here are the ones that have a path laid out for them through a family business. If you can't encourage your children to invest in Hickory and you aren't willing to invest in Hickory, then why do you think anyone else would want to invest in Hickory?
I have heard the saying "Winners never quit and quitters never win." The truth of the matter is that Winners know when to quit. We are getting down to the quick. We have lost and lost and lost and been beat down and been treated like outsiders, when this community is as much or more our birthright as those who have usurped control. Nobody has asked for anything other than a chance... an opportunity... and we are treated like second class citizens in the city where many of us were born and even more of us were raised. You want us gone, then why don't you help us leave and you can have the place to yourselves to continue doing the same ole, same ole, since many don't want to work together to make this community better.
I can't accept failure. It eats at me to live through this stagnation. To work hard just to survive with no mind that anything is going to get better. That is the reason I think and share my thoughts with the public. First of all it is therapeutic to tell this story and second of all it needs to be said by somebody. I am doing nothing wrong by telling the public how I feel and what I am observing. This isn't personal unless you want to make it personal.
The Same Ole Same Ole
You can go back and look at the previous State of Hickory messages that I have released over the last 4+ years. I have heard that some of the issues discussed on this blog are preposterous, but if you go back and read the articles, then you see that we have been a lot closer to right than wrong.
In the end, I'll leave you a thought to the wise. I wouldn't be as worried about this forum and it's message, or my message, as much as when I might choose to walk away, because at that point you will know that I have decided that this is a lost cause and it isn't worth my time. I've seen a lot of people do that over the last few years. It's becoming a trend.
The State of Hickory, North Carolina 2009 - I told you in this 2009 message, "We are losing many of our best and brightest young people in this area, because of the lack of opportunity."... "We cannot afford to turn this area into a retirement village."... "The Strategy has to be jobs."
Ted Abernathy of the Southern Growth Policies Board has been brought into Catawba County to study the issues we face and construct policies that can get our community moving forward again. One of his leading recommendations is that we are going to have to reset our Manufacturing base towards Modern realities. The Western Piedmont Council of Governments statistics confirmed both the loss of our younger generations and the exacerbated aging of the local populous.
When I wrote about these issues 4 years ago it was taboo. We had not gone into the depths of jobs losses that neared 15% U-3 unemployment by the Summer of 2009. Locals thought they had seen the worst of it when I released this State of Hickory message. We still have not recovered to the levels we were at when this message was released.
The State of Hickory - January 2010 - I told you in this 2010 message, "The idea of an Economic and Science Fair is sound. Local businesses and government can sponsor the event. We just need to get the ball going and get the word out so that folks can get started."
We have seen the formation of the Edison Project, in which Entrepreneurs submit business proposals and have mentors help them formulate plans and then come forward in a contest that awards money to the three best plans as voted on by an audience that attends the event. I take no credit in this endeavor. It is a success and that is what makes me happy. Opportunities granted... Results achieved.
"I really would like to see a point-counterpoint discussion of issues done in the Hickory Daily Record and on Hal Row's First Talk show. We need a lively and vigorous discussion of the issues and these are truly the only media forums devoted to this area. Give everyone the topics and/or questions ahead of time and let them really think about it and then let's truly go into some depth on pertinent issues. Frankly, I am sick of hearing the same ole talking points bandied about over and over and over again by the same ole usual suspects. You want to sell some papers? You want to sell some ad time? Free and Effective Content. Let's Go."
We got this with the referendum. We had several discussions and back and forth and an actual in studio debate. I can live with how the referendum vote turned out when we saw an actual real Democratic process play out for once in this community.
The State Of Hickory 2011 - I told you in this 2011 message, Trying to evolve towards modern realities - ... What I related was that we had not modernized our manufacturing structure. We had rested on our laurels and expected the future to come to us. And what we found out is that evolution did come to us, and it was a harsh reality, because we were not prepared for it. I honestly believe that we have taken more than the initial steps over the last couple of years to address many of these issues, but we cannot stop here; because if we stop, then we are going to end up right back where we were or worse.
Once again we look at what Ted Abernathy has brought to the table and it confirms the Hound's findings. I don't come up with this stuff off the top of my head. This is called research and listening.
"Economic Realities - Currently manufacturing only makes up 28% of the workforce of Catawba County. Back in 1990 manufacturing made up 56% of our workforce. The median household income for Catawba County was $40,536 as of the 2000 census. The American Community Survey shows that median household income, as of 2009, is $41,116. This means that over a nine-year period the county only saw a growth in income for households of 1.43%. Over that same time, the Consumer Price Index in the United States grew by 23%. This means that to keep up with the cost of living, the year 2000 household income of $40,536 should be $49,950.38. What happened to that $8,834? Could you not use that money today?"
"Hickory's loss of Relevance - The people who long for what Hickory was, can't understand that we can't get back to what Hickory was demographically or structurally. Their longing for what we were is destroying our future. It is destroying our capacity to change. They are longing for that furniture and textile world. We can do more manufacturing, but it is going to have to be high tech manufacturing or unique craftsmanship. We won’t be building crate furniture or producing everyday textiles."
The State Of Hickory 2012 - "Skin in the game - Conover put skin in the game with the Conover Station Project. While the City of Hickory has touted the Brownfield grants as a way to revitalize unused, blighted properties, Conover has already taken action with the revitalization of the Warlong building by retrofitting this old building towards modern realities and concerns. This building looks to be a new, modern center of economic activity in Conover. In my opinion this will end up being Conover's new Downtown with several new sites of Economic Commerce, like the Manufacturing Solutions Center, surrounding this building. Where the City of Hickory and its power brokers have demanded that Union Square must be Hickory's Downtown, Conover has decided to take a more realistic and open minded approach towards the realities of the future."
Conover and City Manager Donald Duncan have received State and national attention with what they have done with the Conover Station and this year they have moved forward with the addition of the Manufacturing Solutions Center at this site. They have taken calculated risks that look to pay off handsomely in the near term and the future. Conover is a local community moving forward and finding ways to make things happen.
"Action speaks louder than words - Look at the way Hickory is laid out. Look at its old manufacturing structures. Hickory has not been strategically designed. It is a mess the way that Hickory has been laid out and there are people who want to keep moving forward in such a fashion. That is unreasonable. As we heard at the entrepreneurial summit a few weeks ago, there has never been a normal. We have to create the future. If we do not create the future, it will be created for us by external forces. We have so much to gain by joining together in a process of structured goals and development. Sure, these plans should be able to be reassessed, but to not have plans is to set yourself up to have others determine your future!"
Scott Millar said it in the Hickory Daily Record this past weekend. We lack inventory when it comes to structures for modern manufacturing. We need buildings with ceilings that are 30+ feet high that can easily be adapted and expanded. The Old Manufactuting buildings around here have 10 to 12 foot ceilings and they are locked in and can't be easily retrofitted and/or expanded. A few of those old buildings might be salvageable for nostalgic purposes, but while they are sitting around unoccupied and while we are going through a period of no growth, then we need to encourage that some of these buildings be taken down. Some of that property would be worth more without the building and would be a lot easier to develop. We need to get to moving down that path. The sooner the better.
Here we are for the fifth consecutive year attempting to characterize where Hickory's Economy and Culture are at moving through the year 2013. Once again we look at where we have been and where the trends show us heading. I have spent the past year speaking with people from across the cultural and socio-economic strata of our area and I will relate to you the collective story that comes forward from my perspective.
This past year was another year of stagnation in this community. The economy relatively did not grow in anything other than an anecdotal way.. Sure there have been a few businesses that moved to the area, but for every business venture created there have been an equal number or more that are no longer with us.
It seems that the new types of businesses that have come into existence in our community are the "Thrift" types of businesses. I am not saying that this is good or bad. I am just pointing out that there are many businesses that sell second hand, close out, overstocked or consignment goods in our community. They have always been here, but they are prevalent in the community to a greater degree than ever. Why have we seen a proliferation of such businesses?
In the current economy people are obviously looking to cut out waste, cut costs, and stretch dollars. Not too long ago people would throw possessions away without a second thought. Now people will look to sell items/assets that they no longer need and take the money obtained to buy things that they currently need. People are being forced to take a long look at their finances and decide what are necessities and what are extras.
Such a mindset might be wise in the long run, but it does not bode well for the short term prospects of an economy. As many of you know, I work as a Chef. During the Boom years people threw Grand Parties at my Aunt's Restaurant and functions we catered to. Whether Private or Corporate Affairs, people asked for the finest foods to be served in the finest settings under the finest of circumstances. It wasn't unusual for people to spend thousands of dollars on a party. Those types of extravaganzas have died out for the most part in this community. They were actually one of the first victims of this downturn.
As this community has aged what we have seen in Restaurant and Hospitality is more older people sharing or ordering half portions. Customers demand even greater service, but ticket/cover averages are way down. In the restaurant business, we are seeing people working harder to try to maintain income at the same time that costs have sky rocketed. I am sure that this is the same in most businesses and this is not an optimistic climate. It is about hanging on. It is about Survival. What is most stressful is to have the feeling that the worst is yet to come.
The Calm before the Storm
Have you ever been in a Hurricane? I have been in a couple.
I'm not talking about sitting hundreds of miles inland. I am talking about being a mile or so from the shoreline. You see the thing forming out in the Atlantic and it starts creeping your way. You can't get all distraught about it, but you have to pay attention. You have to remain vigilant. It can turn away, but there comes a point where you know that you are going to have to deal with it. You'll have to batten down and make sure you have provisions. You'll have people fretting like it is the end of the world and others acting like it's just going to be a shower. There is always a surreal anticipation that accompanies every storm.
Much like those Hurricanes, there seems to be an eerie calm in this community. It's like living in a different dimension. The world seems to go about it's business as if things are OK while you can see and sense that they aren't. Eventually, Interest Rates will have to Rise and when they do the Federal Government will not be able to service the interest on the $16 trillion (and growing by leaps and bounds) debt and will be forced to accelerate the money printing or go ahead and default, which will mean the end of the current dollar. Whichever happens, you will understand that the complacency that has gone on for years cannot be sustained on this mirage. A million times Zero Equals?
In this community, we have acted as though if we just don't make any substantial expenditures, then everything will work out when the economy turns around. What people have taken for granted is that this is a normal business cycle and eventually it will turn around. I am going to tell you. and I have told you for years, this is not normal... this is the new normal. You can cut your costs to zero, and we are to the point of cutting into the bone, but it doesn't mean you are going to make a penny to save a penny. In order to grow an economy you have to invest in it. Where do you invest? You invest in real people. You invest in the middle class.
The community isn't making anything off of the investments it has sitting in T-Bills and other Money Market instruments. As a matter of fact much of this money is being used against us. It is being utilized by the hyenas on Wall Street to off shore our jobs and build up China's economy and this is only exacerbated by the Federal Government's debt to China. Go on the internet and look at the Financial Capitals in China (Shanghai and Hong Kong) or the Middle East (Dubai). Go look at the videos. You see 100 times the development there that you do in any of the American cities. Check out the modern structures they are building off of the debt of our economy.
My cousin lives in South Charlotte. I hear about Charlotte's problems. In the couple times I have had a chance to get to Charlotte over the last year, it is easy to see that it is continuing to grow. New projects are happening currently even if not at the pace they were in the '90s and '00s. The key is that they have continued to take ownership of their economy and they are not complacent. It is called Grow or Die... Move Forward or Die.
And/Both
I can see the realities as well as anyone. There is currently no velocity to our local economy. This malaise has fed off of itself. Our local economy is devouring itself. The reality is that income is stagnant, but there is inflation in the pipeline. As a community we need to help people understand the necessity to hedge against the realities of inflation, while preparing and attuning themselves towards opportunities.
To hedge against the current economic realities, which will in the aggregate only get worse, we need to lighten the load and become as mobile as possible. If you can voluntarily sell an asset today, then you might get something out of it. If you don't have the income to pay your bills and you find yourself in a bind; you might just be forced to liquidate that asset in the future and you will get a lot less, to nothing, for it. Also, in an inflationary environment that asset is going to lose value compared to the currency, especially if it isn't a necessity. Having no major debt will increase your quality of life. You can take a load off your shoulders by reducing expenses. If you are having a tough time meeting your mortgage payments and it is causing you anxiety, then you should try to sell your house. If you can't sell it, then there is nothing wrong with walking away from it. There is no reason to be forced into playing a losing hand.
By the same token, I believe that one of the major reasons you should stay out of debt to become more mobile is that you might want to leave this community. If the people at the top of the food chain in Hickory aren't willing to reinvest in their ecosystem, then it is time to get out of their way and let them have it. That is what the young people (the millennials) are doing. As I have pointed to on this blog, the younger generations have chosen to go where the money is. They don't seem to care about having possessions that weigh them down or to live in houses and have mortgages that weigh them down. If they don't like it here, they are more than willing to go there. Maybe there is a lot to learn from that paradigm. You don't have to accept the Race to the Bottom. You don't have to accept failure.
Failure
I understood at a young age that no one was going to help me.... as a matter of fact people were going to stand in my way and be impediments towards my success... That if I fail it isn't on them, It is on me, because part of my task is to move these impediments out of the way.
You have people in this life that actually make an effort and then you have impediments. These people who impede progress don't understand the obstacles that they create. They believe that they are operating with the best of intentions. They believe that they are seeking the greater good... what will be the best result for the most people. But, the reality is that they are living in denial. God determines what is best for the greater good... not any man.
Non-performance is the very definition of failure. We have had a non-performing local economy for more than a decade. I think most people will admit the realities of the local economy. The only time you hear about sunshine and lollipops is when some of the local elected officials, bureaucrats, and marketing gurus want to put a happy face on everything. Call it issues, problems, or challenges, but the reality is the same thing and semantics isn't going to change the cold hard reality.
The frustrations of many in this community come from the fact that they bring forward ideas and constantly and summarily the ideas are shot down by the local entrenched establishment. This year we came forward with the Referendum on Ward specific voting and we lost, because the establishment rallied their mind-numbed minion through what amounted to be scare tactics and ignorant innuendo. It is what it is. You learn and move forward.
...And the South side of the City of Hickory continues to fall apart. Last year I talked about actions speaking louder than words. This year we see that Actions have spoken louder than words. It is more than obvious after five years that none of the local establishment is going to do anything to uplift the areas of Hickory that have fallen on hard times. They are stuck on a notion that this will happen naturally... Some Day.
We are not going to see policies directed towards these areas of need. No capital is coming from altruistic principles. I ask where is the fundamental pride in this community? Pride through action and not words. The fundamental pride that it took to build this community and took to maintain this community for over 100 years!!!
Accepting Failure
I have heard it said by people of the greatest means in our community. Most of them tell their children that they shouldn't look to come back here after they graduate from college and the only kids that do come back here are the ones that have a path laid out for them through a family business. If you can't encourage your children to invest in Hickory and you aren't willing to invest in Hickory, then why do you think anyone else would want to invest in Hickory?
I have heard the saying "Winners never quit and quitters never win." The truth of the matter is that Winners know when to quit. We are getting down to the quick. We have lost and lost and lost and been beat down and been treated like outsiders, when this community is as much or more our birthright as those who have usurped control. Nobody has asked for anything other than a chance... an opportunity... and we are treated like second class citizens in the city where many of us were born and even more of us were raised. You want us gone, then why don't you help us leave and you can have the place to yourselves to continue doing the same ole, same ole, since many don't want to work together to make this community better.
I can't accept failure. It eats at me to live through this stagnation. To work hard just to survive with no mind that anything is going to get better. That is the reason I think and share my thoughts with the public. First of all it is therapeutic to tell this story and second of all it needs to be said by somebody. I am doing nothing wrong by telling the public how I feel and what I am observing. This isn't personal unless you want to make it personal.
The Same Ole Same Ole
You can go back and look at the previous State of Hickory messages that I have released over the last 4+ years. I have heard that some of the issues discussed on this blog are preposterous, but if you go back and read the articles, then you see that we have been a lot closer to right than wrong.
In the end, I'll leave you a thought to the wise. I wouldn't be as worried about this forum and it's message, or my message, as much as when I might choose to walk away, because at that point you will know that I have decided that this is a lost cause and it isn't worth my time. I've seen a lot of people do that over the last few years. It's becoming a trend.
The State of Hickory, North Carolina 2009 - I told you in this 2009 message, "We are losing many of our best and brightest young people in this area, because of the lack of opportunity."... "We cannot afford to turn this area into a retirement village."... "The Strategy has to be jobs."
Ted Abernathy of the Southern Growth Policies Board has been brought into Catawba County to study the issues we face and construct policies that can get our community moving forward again. One of his leading recommendations is that we are going to have to reset our Manufacturing base towards Modern realities. The Western Piedmont Council of Governments statistics confirmed both the loss of our younger generations and the exacerbated aging of the local populous.
When I wrote about these issues 4 years ago it was taboo. We had not gone into the depths of jobs losses that neared 15% U-3 unemployment by the Summer of 2009. Locals thought they had seen the worst of it when I released this State of Hickory message. We still have not recovered to the levels we were at when this message was released.
The State of Hickory - January 2010 - I told you in this 2010 message, "The idea of an Economic and Science Fair is sound. Local businesses and government can sponsor the event. We just need to get the ball going and get the word out so that folks can get started."
We have seen the formation of the Edison Project, in which Entrepreneurs submit business proposals and have mentors help them formulate plans and then come forward in a contest that awards money to the three best plans as voted on by an audience that attends the event. I take no credit in this endeavor. It is a success and that is what makes me happy. Opportunities granted... Results achieved.
"I really would like to see a point-counterpoint discussion of issues done in the Hickory Daily Record and on Hal Row's First Talk show. We need a lively and vigorous discussion of the issues and these are truly the only media forums devoted to this area. Give everyone the topics and/or questions ahead of time and let them really think about it and then let's truly go into some depth on pertinent issues. Frankly, I am sick of hearing the same ole talking points bandied about over and over and over again by the same ole usual suspects. You want to sell some papers? You want to sell some ad time? Free and Effective Content. Let's Go."
We got this with the referendum. We had several discussions and back and forth and an actual in studio debate. I can live with how the referendum vote turned out when we saw an actual real Democratic process play out for once in this community.
The State Of Hickory 2011 - I told you in this 2011 message, Trying to evolve towards modern realities - ... What I related was that we had not modernized our manufacturing structure. We had rested on our laurels and expected the future to come to us. And what we found out is that evolution did come to us, and it was a harsh reality, because we were not prepared for it. I honestly believe that we have taken more than the initial steps over the last couple of years to address many of these issues, but we cannot stop here; because if we stop, then we are going to end up right back where we were or worse.
Once again we look at what Ted Abernathy has brought to the table and it confirms the Hound's findings. I don't come up with this stuff off the top of my head. This is called research and listening.
"Economic Realities - Currently manufacturing only makes up 28% of the workforce of Catawba County. Back in 1990 manufacturing made up 56% of our workforce. The median household income for Catawba County was $40,536 as of the 2000 census. The American Community Survey shows that median household income, as of 2009, is $41,116. This means that over a nine-year period the county only saw a growth in income for households of 1.43%. Over that same time, the Consumer Price Index in the United States grew by 23%. This means that to keep up with the cost of living, the year 2000 household income of $40,536 should be $49,950.38. What happened to that $8,834? Could you not use that money today?"
"Hickory's loss of Relevance - The people who long for what Hickory was, can't understand that we can't get back to what Hickory was demographically or structurally. Their longing for what we were is destroying our future. It is destroying our capacity to change. They are longing for that furniture and textile world. We can do more manufacturing, but it is going to have to be high tech manufacturing or unique craftsmanship. We won’t be building crate furniture or producing everyday textiles."
The State Of Hickory 2012 - "Skin in the game - Conover put skin in the game with the Conover Station Project. While the City of Hickory has touted the Brownfield grants as a way to revitalize unused, blighted properties, Conover has already taken action with the revitalization of the Warlong building by retrofitting this old building towards modern realities and concerns. This building looks to be a new, modern center of economic activity in Conover. In my opinion this will end up being Conover's new Downtown with several new sites of Economic Commerce, like the Manufacturing Solutions Center, surrounding this building. Where the City of Hickory and its power brokers have demanded that Union Square must be Hickory's Downtown, Conover has decided to take a more realistic and open minded approach towards the realities of the future."
Conover and City Manager Donald Duncan have received State and national attention with what they have done with the Conover Station and this year they have moved forward with the addition of the Manufacturing Solutions Center at this site. They have taken calculated risks that look to pay off handsomely in the near term and the future. Conover is a local community moving forward and finding ways to make things happen.
"Action speaks louder than words - Look at the way Hickory is laid out. Look at its old manufacturing structures. Hickory has not been strategically designed. It is a mess the way that Hickory has been laid out and there are people who want to keep moving forward in such a fashion. That is unreasonable. As we heard at the entrepreneurial summit a few weeks ago, there has never been a normal. We have to create the future. If we do not create the future, it will be created for us by external forces. We have so much to gain by joining together in a process of structured goals and development. Sure, these plans should be able to be reassessed, but to not have plans is to set yourself up to have others determine your future!"
Scott Millar said it in the Hickory Daily Record this past weekend. We lack inventory when it comes to structures for modern manufacturing. We need buildings with ceilings that are 30+ feet high that can easily be adapted and expanded. The Old Manufactuting buildings around here have 10 to 12 foot ceilings and they are locked in and can't be easily retrofitted and/or expanded. A few of those old buildings might be salvageable for nostalgic purposes, but while they are sitting around unoccupied and while we are going through a period of no growth, then we need to encourage that some of these buildings be taken down. Some of that property would be worth more without the building and would be a lot easier to develop. We need to get to moving down that path. The sooner the better.
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