The Economic Fallout Continues

The Obama Administration likes to tout the fact that, during their first year in office, the economy "didn't fall off the cliff." Okay, I'll give them that, and I'll remind regular readers that I said prior to the 2008 election, that whoever won the presidency would probably end up being the loser, as the economic plunge and its aftermath would make life difficult for them, politically (not to count millions of Americans suffering the direct consequences). So, as we begin 2010, where are we, economically speaking?

Well, the economy has stopped plunging downward, and it even has seen some minimal growth, but the emphasis has to be on "minimal." A year ago the nation was losing in excess of a half million jobs every month. Now the unemployment rate sits at 10% (although counting people who have gone to part time work, it may well be in the mid to upper teens), and the number of job losses has slowed considerably, to "only" 85,000 in December 2009. We always have to remember that if YOU are one of those 85,000, "only" is not an important word to you. So, while things certainly are not great, economically speaking, there has been some improvement. So what troubles me?

I'm a chronic worrier, and one of the things that has me worried (notice I said "one of the things") is the dire situation in many states and local communities. State and local government budgets, including for education, are in deep trouble. When the stimulus bill was passed early last year, there was a certain amount of money that went to help state and local governments in an attempt to prevent layoffs from these entities. I guess, at least to some extent, it did help on that front, but now the "medicine" has been cut or stopped, and whether the patients can now get by on their own is very doubtful in my mind. California's budget has been a mess for years, and now they are really under the gun. All over the country state and local governments are trying to bring revenues and expenditures into balance, but at great cost to many people, and to the overall economy. This whole situation could prove to be more than just a thorn in the side of the economy, but it may even help cause a "double dip" recession.

For the "free marketers," they'll say, "It will weed out unnecessary and inefficient programs," and there is a certain amount of truth to that. Of course, some also have argued that Uncle Sam should have just stood by and let nature take its course with the overall economy. To me, that's a bunch of nonsense. Remember folks, those at the top don't worry about their next meal, or their child's next pair of shoes, or their kids' schooling. It is easy for them to make these "do nothing" arguments, and I understand that. What troubles me is that some middle class/working class folks seem to be on that same page. If nothing had been done by Uncle Sam, including the Federal Reserve, my guess is, many of these same folks would be wondering about those things I just mentioned above, because they would now either be unemployed or underemployed.

I know many Americans, including this one, are concerned about the terrible budget deficit, and with good reason. That's one of the reasons the "winner" in 2008, may end up being the "loser." The Bush Era left the country in terrible debt,* unable to properly finance an "anti depression/recession" package. So, the private credit bubble that so helped ravage the economy is now being combated by a trade off to public credit. Not good, but something had to be done. The overall outcome is still to be determined, but in the meantime, watch those state and local situations, and keep your fingers crossed.

* The Afghanistan and Iraq wars were never paid for, nor was the Medicare prescription drug plan. Of course that didn't stop Bush from cutting taxes, and the wealthy benefited tremendously from Bush's tax cuts and his administration's lax regulatory philosophy. Income inequity grew ever wider, with many middle class folks actually losing ground.

WORD HISTORY:
Nimble-The roots of this word go back to Indo European "nem," which had the notion of "dividing, dealing out." The Old Germanic offshoot was "neman(an)," but rather than the notion of "dividing," the meaning veered to the result of something being divided or dealt out; that is, "take, accept." (See note below) This gave Old English "naemel," with the notion of "take" still very much present, as it meant "quick on the uptake/take in knowledge quickly." By the 1300s, this "quickness to learn" began to fade, as the meaning broadened to "quick afoot," and then also, "agile," and the spelling changed to "nemel." Later still (1400s or 1500s) the spelling changed again and the "b" was added, presumably because it made pronunciation easier, although some believe it was copied from the spelling of "limb."

Note: In Old English the verb "niman" meant "to take," but this was later replaced by "take." Modern German has "nehmen," which still means "to take."