Obama must let the economy shrink

For too long, economists have fallen in love with their mathematical models of certainty and have ignored how poorly these models reflect the real world. Both Bush's economic advisers, who wanted to emphasize trickle-down tax cuts to America's biggest corporations and our wealthiest citizens, and Obama's economic advisers, who wish to cut taxes on working Americans and increase government spending tremendously to revitalize the economy, have it wrong. The problem we have is too much debt-financed consumption. And yet the proposed solution by both parties is to finance more consumption with additional debt.

The Financial Crisis Reshaping the Landscape for Mission: It is my opinion that the current financial crisis, its pure magnitude, is revealing the emptiness and falsity of the idols of the past thirty years of American life."

Well, I for one I certainly hope so.

Something for nothing

Even President Obama showed that you don't have to spend a lot of money to look good. During his inauguration, commentators talked about the fact that the first family wore clothes from J.Crew, a mid-market retailer. "They looked very good but didn't spend a lot of money on it," Brunel said.

Mid-market?! I can't imagine any truly frugal person spending $96 for a pair of jeans (oh, my bad, they're on sale for $76...sheesh!).

Is The New Frugality Really Just Economic Fear? "But so far, nobody has quite reconciled the vision of a sober and repentant new shopper with the substantial government efforts to reignite consumer spending. This year’s Black Friday big-box mobs hint that perhaps bargain binges and postmaterialist values aren’t the same thing. If there’s a deeper shift in our thinking, it’s still to come. And maybe it will. After all, the mere fact that we have managed to characterize consumer shock as frugality chic offers a perverse form of hope: That whatever happens, we’ll never lose our tendency toward optimism — even, it turns out, about our pessimism."

Mr Walker makes a great point. However, there is at least one potential explanation for rapidly shifting consumer attitudes apart from economic fears: baby boomers are now entering retirement at an incredible rate.

Recession Forces Women's Shelter To Turn People Away

From July 2008 to December 2008, the Women's Center and Shelter of Greater Pittsburgh turned away 360 women and children -- 125 percent increase -- while clients increased 19 percent.

The shelter's executive director cites the recession for having to turn people away.

"About 70 percent of the women are saying that in the past year their financial situation has changed at home. There's a lot more stress and a lot less hope," said Shirl Regan.

It seems to me we can wait to see what government does for people like this or we can roll up our sleeves and start helping out at the grassroots level.

Kindness, Gratitude and Your Career: "If you're overly kind to someone who reports to you, he might be more likely to ask for a raise."

This is a perfect example of what happens when your field of vision is limited only to yourself: Even ethical acts become subject to a quid pro quo exchange mentality. This guy seriously needs to read this, or this, or better yet, this.

Connecticut Opera closes down, citing bad economy

Orchestras, ballets and opera companies across the country are facing huge deficits. The Los Angeles Opera is laying off 17 people, cutting salaries and will stage fewer performances this year. The Miami City Ballet is cutting eight dancers. The Baltimore Opera has declared bankruptcy.

The nation's premier opera company, the Metropolitan Opera, this week dropped four productions from the 2009-10 season and slashed salaries because of the economy. The Opera Orchestra of New York also canceled its two remaining performances this season because of the recession.

The nonprofit group Americans for the Arts estimates 10,000 arts organizations could disappear in 2009.

I'm not a big fan of opera, but it brings up some interesting questions: does art play a necessary role in society, and if so, to what extent should government take measures to preserve art in an economic crisis?

Icelanders' Byword For Christmas Season: Frugality: "Before, you didn't think about what you were buying, but now we've been woken up," said Holmfridur Kristinsdottir, who sells such delicacies as dried fish and pungent chunks of fermented shark at Reykjavik's flea market. "When we buy beer now, we buy Icelandic beer - it's cheaper."

Well, I say no matter how tough times get, some things are too important to skimp on.

Recession's Silver Lining: "And don't forget what is perhaps the most popular Christmas movie of all time, "It's a Wonderful Life," in which George Bailey reassures us that regular Joes can triumph in the never-ending struggle between self-interest and what's good for the whole. The FBI labeled the movie "communist propaganda." It didn't understand that it was only one of the many narratives that we need to make capitalism more livable.

It's in this same spirit that I think my friend and others are looking on the bright side of recession. They see this difficult moment as a chance to retrieve some moral clarity. I think they're also hoping that the tough times will reinvent them.

Indeed. A great man once said, "A seed does not come to life unless it dies."

Everybody wants to know how to beat the recession. Apparently, according to Newsweek, people enroll for seminary in record numbers during economic downturns. However, as the author points out, this may not be such a good idea since church revenues are sharply down. Of course, as a seminary student myself, I can tell you that American Christian institutions overall are in rapid decline, so ministry may be a good way to spend your life in tough times, but it won't likely be a good way to pay the bills in the years to come.

The Frugal Generation Is Back In Vogue: "[My mother] doesn't need anything, she says. But she doesn't "need" anything because she's always been frugal enough to provide for herself and many others. And she doesn't "want" anything because she's the least materialistic person I've ever known. She's the great beauty in a large, good-looking brood -- a true Texas rose -- but my mother has never wasted money or energy adorning herself or seeking attention.

She embodies pretty much the opposite of the spirit of our times -- or what that spirit has been, until recent, sobering events pulled us up short. If my generation gets another chance and chooses to live modestly, within its means, without the unrestrained appetites and self-seeking materialism we've indulged in, maybe we will live long and prosper as my mother has."

Read the whole thing.

Extreme Frugality: Starting Anew

The point is to move forward and create an entirely new existence—not just for me, or for you, but for our entire country. What kind of economy is dependent on its citizens spending more and more? That is certainly not who we used to be or how we measured ourselves. It’s laughable to imagine FDR exhorting people simply to go out and spend to save the country. If that’s the only thing that will work, then maybe it’s best if we don’t “recover,” “regroup,” or “rebound.”

Words to live by brother, words to live by.

U.S. Says It Will Bail Out Christmas: "Inside Treasury, some officials privately worry that such a precedent could result in the nationalization of Santa Claus, leading to similar calls for help next year from the Easter Bunny and even Valentine's Day."

(Hat tip: Kruse Kronicle)

Road to ruin: Usury, greed and the paper economy:

We see where this tragic trajectory has led. Our economy has been hollowed out by a financial sector that helped to stifle manufacturing. Honest pursuits, as Geoghegan calls the production of goods, could not compete with the profits of finance once legal constraints on usury were dismantled.

Nice little article! Read it and post your thoughts. Should there be limits in interest rates? Is charging "usury" immoral?

Here's another contest question for everyone out there: What does the U.S. Supreme Court and Martin Luther have in common? Winner gets a coffee mug.

Trading Down: How Will Frugality Affect Retail Spending?: From the comments: "The best sign of this strategy taking hold is the number of BMW SUVs one finds in the parking lots of Walmart; it is a massive reversal of psychology as the BMW SUV was the ultimate in aspirational buyer vehicle."

Heh, I must confess, there's something satisfying about seeing BMW's in the Wal-Mart parking lot; I guess you could call it "Schadenfreude."