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Pessimist or Realist – either way…

By Derry Brownfield

For the past several years I have been referred to as a pessimist, a doom-and-gloomer, even unkind and trying to scare people. There are a few individuals in this nation who have read the warning signs and are better informed spokespersons than the general public, but many citizens are beginning to take notice and listening to what these realistic thinkers are saying. I certainly don’t claim to be a prophet or have any insight into the future. All I can do is study the facts, recall the past and try to determine what to expect in the future. For the past 30 years I have been studying economic history and what I have learned is totally different from what I was taught in the economics courses I took in 1949 and 1950 at the University of Missouri…

Let’s look at the warning signs and get realistic about the coming months or perhaps years. I don’t have the time or space in this month’s article to discuss the bursting of the housing bubble, the bank bailouts, the auto bailouts or even cash-for-clunkers. We know that 50% of our nation’s wealth was wiped out when the stock market dropped from 14,165 on October 9th, 2007 to a low of 6,469 on March 6th, 2009. While our Treasury Secretary says the “recession is over” and our President tells us he has pulled the economy back from the brink, let’s take a closer look at what is really on the horizon.

The unemployment rate reported by the U.S. Labor Department is misleading. The figures do not take into consideration the jobless Americans who have been unemployed for 27 weeks or longer and have given up on finding work. Each month more out-of-work Americans are no longer counted as unemployed. The unemployed rate for young Americans, age 16 to 24, is now over 52%. By next year there will be still more chronically unemployed so the figures will look better but will actually be much worse. Also many who are considered working are working only part time or have taken jobs with much lower pay. Since such a high percentage of our manufacturing jobs have been outsourced to other nations, it is not likely to improve in the near future. Real unemployment is probably close to 20%. About where it was during the Great Depression.

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