BY RUSSELL TURNER
ROSE COLORED GLASSES
It is a sad fact that we humans have a serious flaw, we tend to believe what we want to believe and ignore the cold hard facts. It kind of reminds of someone who has a serious illness and goes to the doctor; instead of believing the competent physician who has made a correct diagnosis, they would rather believe a incompetent doctor that prescribes a simple useless cure. While it is far easier to undergo the useless cure that does no good, the original problem is only getting worse. While many of the so-called experts on the economy keep telling us that everything is looking good, we need to get into the real world and have a dose of reality.
While many people point to the astronomically high stock market as being an indicator to a booming economy, I have some reservations. Granted some people are making huge sums of money in the stock market, but we need to remember that roughly 20% of the American people own 80% of the stock. I also have the opinion that the market has inflated into a huge bubble. Because of the Federal Reserve manipulating the interest rate, many people in search of a decent return on their money have put huge sums of their money into the market. The price-to-earnings ratio is totally out of balance; instead of expecting the stock to pay for itself, most people are only counting on the stock to keep going up with little or no dividend. A more trustworthy indicator is consumer spending, or rather the lack of it.
We need to remember that 70% of the U.S. GDP is consumer spending. Many of the most popular chain stores in the U.S. — Sears, JC Penney, Macy’s, Payless Shoe Source, Sports Authority, American Eagle, RadioShack and many others — are closing all or some of their stores at a record pace this year. Through the first quarter of 2017, retailers have announced they will be closing almost 3,000 stores. For perspective, that is way above the 1,153 for the same time last year and even more than during the Financial Crisis of 2008-2009. According to Labor Department data the United States has lost over 600,000 retail jobs from February through March. We haven’t seen numbers of that magnitude since the 2008-2009 recession. There are some who claim that the reason for the decline is online shopping such as Amazon. While Amazon might account for some of it, the auto industry is also experiencing a decline and very few autos are purchased on the internet. The number of new cars hitting the road has decelerated to a level that has historically been associated with recession. Even Harley Davidson has experienced Inventory backing up at dealers’ showrooms. The number of motorcycles shipped in the first 90 days of 2017 dropped by 14.7% compared with the same period last year.
I am amazed that the people in government cannot understand the true state of our economy. Too many people in government can only complain that we are not giving them enough of our hard earned money, the fact is very simple we don’t have it to give them. It is about time that we take off the rose colored glasses and put on a good pair of reading glasses and take a good look at the true numbers.
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