Showing posts with label economics. Show all posts
Showing posts with label economics. Show all posts

Saturday, January 28, 2017

Why the 20% Tariff on Mexican Goods Could be an American Economic Disaster

In any basic Economics class on Trade, I ask my students why they don't raise their own sheep, harvest the wool, process it into yarn, and make their own clothes. I ask why they don't set up a greenhouse, grow their own coffee beans, and roast their own coffee. I ask why they don't chop down their own tree, mill it with the appropriate tools, and make their own door molding instead of running down to Home Depot.

Intuitively, students understand how ridiculous this is. They conclude that while they could, if absolutely necessary, do these things, it is highly inefficient. The time and effort needed to undertake these actions means would require so much of their effort that they would have to give up engaging in other activities - such as washing their clothes, going to work, or studying for school. They understand quite easily that it makes far more sense to do what they do best - wait tables, work at a retail store, stock items in a warehouse - and then use the fruit of their labor to purchase those goods they do not or can not make as efficiently (such as a T-shirt, a can of coffee, or a piece of lumber.)

That, of course, is the basis of trade: nations do what they do best, and trade for those items that others produce more efficiently.

Mexico is the United States' third largest trading partners. In spite of the social media comments by those who insist they don't buy Mexican goods anyway, we import - quite cost-effectively - billions of dollars of goods from Mexico annually. Beer. Washing Machines. Chevy and Dodge Trucks. Medical Equipment. The United States imports a total of about $295 billion per year from Mexico, including $74 billion worth of vehicles, $63 billion of electrical machinery, $49 billion in machinery and $21 billion in agricultural products. Mexico is the second-largest supplier of agricultural imports to the United States: tomatoes, limes, lettuce, avocados, and more.

Trump's current proposal is to pay for his wall with a 20% import tariff on Mexican goods. Applying this 20% tax to $295 billion worth of imports would result in an increase in prices to the tune of almost 60 Billion dollars annually.

How would this affect Americans?

Well, once again, let's break this down into understandable personal transactions.

Let's say that I have $100 in my pocket. I go to the store to purchase a tricycle for my child, and it costs $50. I can buy this tricycle for $50, and still have another $50 left in my pocket to spend elsewhere - a pizza for the family for dinner, a bouquet of flowers for someone on their birthday, and one or two new pair of blue jeans.

Now let's say that tricycle was made in Mexico, and now there is a 20% tax on top of that price. Instead of $50, that tricycle now costs me $60, and I purchase it. But wait, now I only have $40 left in my pocket instead of $50 - in other words, i have $10 less in disposable income than I had before.

Who loses? I have to give up some other purchase: either the pizza, or the flowers, or one of the pair of jeans. Some American business must lose out, because I no longer have the ability to purchase the same number of goods I could before.

Now multiply this times all the consumers in the American economy. With the tax, $60 Billion dollars less is available for spending in American businesses.

But it gets worse.

Let's say that, due to this new tax and my lower disposable income as a result, that I decided to skip buying the flowers at the local florist. If I *had* purchased those flowers, the ten dollar bill would not have sat in a cash register: the Florist may have used some of that to buy ribbon from a ribbon manufacturer, or to buy some vases in which to display flowers, or to pay their delivery man. And of course, that delivery man would then have used that income to purchase something for himself - perhaps a new windshield wiper, or a baseball for his child, or a ticket to a local performance.

And since I couldn't buy those flowers, none of those transactions took place.

And now, multiply that by $60 billion dollars which will no longer multiply throughout the economy.

The 20% tariff may be a great way for the President to buy political capital and 'pretend' that Mexico is paying for his wall...but the reality is that Americans will pay - over and over - as the economy takes a hit it can not afford to take.


Thomas Simmons is a graduate of Hofstra University and Hofstra Law School, and has worked as an Economist for the last 30 years. He is the author of three college textbooks on Economics.


Wednesday, August 15, 2012

Small Business Series 3: Arcadia and Squeaky Wheel

 In the first two installments of this series, we concentrated on the contributions and quality of small, local entrepreneurs.  One of the themes that continues to emerge is the concern that so many of these small enterprises have for their customers, workers, and communities.  And in that vein, two of the most socially responsible, forward-thinking companies that come to mind are Arcadia and Squeaky Wheel Media....

It was the first Monday of the month, a night when Arcadia regularly sponsors fundraising events for local charities.  This night, their sales and the raffles they sold were helping to support    Trinity Place Shelter, an organization dedicated to helping homeless LGBTQ youth transition from life in a shelter to life as an independent adult.    So, off we went to find this store located at 249 West 23rd Street, just off of 7th Avenue, in the Chelsea neighborhood of New York City.  

“Find” was the operative word.  Retail space in New York City is expensive, and small businesses need to find ways to make maximum use of small rental spaces to survive.  We walked past it, even though we were actively looking for it.   

What a shame for all those other New Yorkers or passers-by who might miss Arcadia in their hurry:  this shop is an absolute gem. 

Upon entering, our eyes were treated to an incredible array of gifts, candles, glassware, books, wind chimes, jewelry, and an assortment of gifts that were clearly unique, hand-made, and truly ‘niche’ goods.   It only took me minutes to learn the name of Jay Gurewitsch (store owner and driving force) and his partner Ian Edwards (sustainability & communications specialist at the register).  And what impressed me more than the quality products they supplied, was the philosophy,  caring, and the passion that went into selecting those products. 

The vision for Arcadia grew out of Jay’s experiences in retail environments; “simple is beautiful” was his response to the complicated, difficult, hectic lives many New Yorkers lived.  As a child raised in a modern Orthodox Jewish family in Brooklyn,  Jay (pictured below) was raised with a deep appreciation of and respect for religion, spirituality, and strongly held personal beliefs. An enormous love of learning and reading colors his approach: he has an in-depth story about every product he carries. He revels in seeking out knowledge of other cultures, religions, and communities, and the broad range of products at Arcadia is a reflection of that search. 

He writes on his website:

“My father’s factory, Star Candle, is a union shop where employees from more than 20 different countries together, frequently generation after generation. It is an American anachronism that is still going strong; where blue collar workers make a decent wage, have health insurance, union membership, a good working environment and produce a reasonably priced product … Watching my father working with his employees, customers and suppliers also taught me some of the most important lessons of my business career; that while the highest ethical conduct may not always pay off financially, it always pays off in far more important ways.”

Like physical manifestations of his father’s employees, the products featured at Arcadia encompass a broad and eclectic cultural stew.  Arcadia focuses as much as possible on fairly traded products made throughout the world, so that their customers’ interest in supporting indigenous populations and their cultures can be achieved. 

What is fascinating about Arcadia is how they reject the standard 'norms:'  they reject mass-produced, standardized corporate products,  but they also reject the jingoist notion that all products must be “American-made” to be worthwhile.  Rather, Arcadia has found a way to work fairly and honestly with small producers in America and around the globe, without regard for political borders. 

 Before leaving that night, we went home with a copper, iron, and wooden bell produced by a couple named Abdul and Fatima, who are members of an artisan cooperative in northwestern India for $24.95, a price we found entirely reasonable, even on our restricted budget.

From recycling packaging to using wind-generated electricity, Arcadia has a vision for a better society – a vision that is embodied in every aspect of their operation.  

This is the kind of business that America, and Americans, need to support.

Arcadia’s emphasis on social responsibility reminded me of another small company I had visited in New York City back in April.   

Update:  In January 2014, Jay announced that the Arcadia storefront would be closing in March 2014.  Some context is important here:  As we all know, 2007 saw the beginning of the deepest recession the US has had since the Great Depression.  Disposable income, production of goods and services, and gross sales – especially in small businesses – all fell.  At the same time, under NYC Mayor Michael Bloomberg (2001 – 2013), more than 40%  of Manhattan was rezoned.  During this time, rents on many small mom-and-pop business skyrocketed, with increases of $25,000 per month being common.  Many local restaurants, gift stores, pubs, and other businesses moved out, and were either replaced by national chain stores or saw their former locations demolished and replaced with towering glass-walled condominiums. Critical community services such as hospitals like St. Vincent’s and even gas stations literally disappeared from the landscape to make way for luxury building projects. This was particularly the case along the west side of Manhattan, in the West Village and  Chelsea neighborhoods, and, today, in the area formerly known as Hell’s Kitchen but now more antiseptically called “Hudson Yards.” I spoke with Jay about whether his decision to close was based on the national economic climate (“macroeconomic” issues) or the changes in the immediate neighborhood (“microeconomic factors.”)  Here is his reply:

“The main factors in closing are both micro and macro in nature.

Chelsea is a VERY different neighborhood than it was 13 years ago.  [It used to be] much more of a neighborhood, far more gay, younger, more focused on design, community, and things that were off the beaten path. That faded over the years, and was declared officially dead by 2007, killed off by the twin axes of the recession and the changing demographics of the neighborhood. The young gays moved on, and were replaced by richer straight folks from the midwest who have no ties to anything in NYC and are just in Chelsea as a way station to somewhere else.

Fair trade was always an excellent way for us to differentiate ourselves from competition and kept us alive longer than we would have if we were just another gift store. It also made us more profit than similar products might have from China because I could charge a premium for them.

My clientele shifted, the economics shifted, and I did not shift fast enough with the times. I should, in retrospect, have moved the store in 2008, or never opened 8th Avenue in the first place - but everything is always 20/20 in hindsight and no one had any way to know how bad and how long it would be bad for

We had our best year in many in 2013, but it simply was not enough, and certainly I was not having any fun anymore - I haven’t enjoyed it in many years. I’ve been in survival mode for 6 years now, and I have had enough.

As for the future – it’s still fairly amorphous

The website has certain areas that produce steady income from customers all over the US (and even abroad) that is almost entirely disconnected from store sales - these are people who find us online, not through the brick and mortar - and in many cases have never been to the store. Without the fixed overhead of a brick and mortar, it’s quite a nice little income source even now - and if I am not busy running a store I can spend time marketing it properly and grow the web business quite quickly I think. Add into that what I hope will be a successful men's jewelry line I am designing, and the website has a rather successful future, selling things that are exclusively available on and nowhere else on earth, online or off. THAT is the future of online. Hypersegmentation."


 Squeaky Wheel Media
With a dozen college business students in tow, I arrived at the door of  Squeaky Wheel Media, an independently-owned media and marketing agency located at 640 West 28th Street (between 11th Avenue and the West Side Highway), also in Manhattan’s Chelsea neighborhood.  

I had arranged this visit knowing little about the agency, except that it came highly recommended: Advertising Age, a time-honored journal of the marketing industry, awarded Squeaky their award for “Best Agency Culture” in their 2010 Small Agency Awards.  And one step out of the elevator in their retro-fitted industrial loft space, and it was easy to see why.

Co-Founder/President Anthony Del Monte has assembled a team of 20 individuals who represent as many nationalities and cultures as 20 people physically can.  Within minutes, one member of his staff was brainstorming a marketing approach with the students, while Anthony took my partner and I aside to brainstorm his latest innovation.  A cockatiel named Cuca flew around the loft, circling the Volkswagen beetle that sits in the middle of the floor.  Before we knew it, piles of pizza for the students arrived.  Our 30 minute visit turned into a 90 minute crash course in successful marketing and building a productive, positive business culture.

Their client base includes the Jackie Robinson Foundation; Lexus; the New York Live Arts; and one of their proudest, the “I Had Cancer” campaign.

 For Mailet Lopez, Squeaky co-founder, this had a personal element; she was diagnosed with stage 2B breast cancer in March 2008, and has been cancer-free since treatment. After her battle and openly talking to others about her experience she decided to give back to the community. “Cancer was not going to start taking control of my life,”she says. 

 In developing , Squeaky created a place where people can share their stories, insights and experiences to inspire others to keep up the fight.  A few months after our visit, Squeaky won the Internet’s "Webby Award” for this socially responsible campaign.

We left excited, energized, and overflowing with ideas and concepts.  It was a genuine joy to see that a New York City business, in the throes of a deadline-driven, frenetic, and sometimes cut throat market, can also be successful while being caring, fun, supportive, socially responsible, and diverse. (And it doesn’t hurt their staff consists of top-notch, high-quality professionals.)

That was my one visit to Squeaky, and it was in April 2012. 

This summer, I happened to be walking along Hudson River park, when a Squeaky employee, Luis, came jogging by.

He recognized my partner and me, and stopped in his tracks.  

Because that’s what Squeaky employees do.

In today’s world, there are no borders.  The small shop on Main Street may ship products to South Africa, while importing raw materials from Turkey.  There is nothing intrinsically wrong with crossing borders, with ‘going global,’ or with expanding markets.

Rather, the problems occur when human concerns take a back seat to stockholder profits; when image is more important than substance; when producers feel they can throw low-quality goods and services at consumers who have no other choices.

Small businesses – like Arcadia, Squeaky Wheel, and others in this series – are the antidote to poor quality, poor working conditions, a languishing economy, and low consumer satisfaction.  And that is why we will continue to push the idea of patronizing local, small businesses and refusing to be held hostages by massive “corporate sameness.”

[This is the third in a series of posts on Small Business in America]

Tuesday, August 14, 2012

Small Business Series 2: The Blue Rock and Sun's Tea Shop

Having just moved to Shelburne Falls, Massachusetts, my partner and I decided to head “into town” one night (town population: 2,058), where we stumbled upon a small restaurant/bar called the  The Blue Rock Restaurant  at 10 Bridge Street.  The front door, packaged between two other storefronts, lead us downstairs to a cozy, ‘familiar feeling’ place that was crowded with locals (and by crowded, I mean that  30 people had us weaving and bobbing to move from place to place). We sat at the two miraculously open bar stools, and were immediately engaged in conversation by bartender Jeff Grader.  
What followed put the “six-degrees-of-separation” concept to shame.  It’s more like two degrees. Maybe fewer.
We ordered our pints of Lefty’s Ale, which the Blue Rock keeps on tap, right in front of the beautiful blue glass rock provided by a local glassblower whose shop is a stone’s throw away from the restaurant.  Lefty (as I wrote in an earlier post) is a former student of mine who has started his own brewing company, and now is one of the fastest-growing and most popular craft brewers in western Massachusetts.  It turns out that our bartender, Jeff, also runs his own graphic design business ("Warped Whimsy"), and had just completed designing Lefty’s labels for his newest variety, “Golden Ale.”  We launched into conversation about Lefty and local businesses, about the local artists’ work on the walls, about the local jazz musicians that play there weekly.

Within a few minutes, we met Chris, the owner, and a waitress named Holly, who, it turns out, lives across the street from us. 

It was our first time there.  It felt like we had been ‘regulars’ for years.  The conversation ran all over the board, and other patrons joined in as the most incredible aromas wafted from the kitchen and absolutely artistic meal presentations were delivered to customers.  It was clear this was no corporate chain, no standardized, bulk-ordered, bland & canned restaurant-supply-house food.  

  These were gourmet creations using local ingredients and personalized recipes.  And everyone there, from the owner to the workers to the diners to those of us at the bar, knew they were at a special and unique place:  a local restaurant drawing on local resources and serving local customers with local flavor.  

We stayed longer than we should have, but that’s because we entered into a conversation with Holly about her difficulty finding quality bulk herbs.  Since Danny and I were headed to New York City two days later, we offered to look for a supplier.  Holly created a list for us, and we said our good-nights.

A few day later, we found ourselves hunting herbs in New York. 

To be sure, bulk spices and herbs are available in many places, and many large companies package aging spices of various quality, in bulk, for mass distribution.  We wanted something better…and we headed into Chinatown.

Poking our heads in and out of stores on the side streets, we found Sun’s Organic Tea Shop at 79 Bayard Street, between Mott and Mulberry Street.  

Sun’s is not a chain, not an outlet, and not a tourist trap owned by some absentee investor. From the moment we stepped inside this tiny store packed with jars of herbs and teas and spices, we knew we were in a one-woman specialty shop. In fact, Sun told us that she hadn’t had a vacation in years, simply because of her devotion to her store and her customers.

The walls were lined with glass jars, each with hand-written labels and prices.  We presented our list and wondered how many she could provide us with: hibiscus, milk thistle seeds, thistle leaves, lemon verbena, lemon balm.  As we rattled off each name, she pointed here and there, cheerfully telling us that yes, of course she had all of these herbs, and we began our bulk purchases.  Sun handled measuring out the herbs by the ounce and sealing them in air-tight bags, as she trusted us pulling and replacing the jars from all over her shelves. She told us about each herb as she measured, offering special instructions for the proper use of each, and we felt like we were at a house party rather than in a store.  She threw in small samples of some herbs we hadn’t ordered for free, and talleyed up the bill on a hand-held calculator.

We thoroughly enjoyed our shopping excursion, and left just as some regular customers came in pick up some specialized teas.  A few days later, we were delivering out treasure to the Blue Rock.

As different as they are – the restaurant in rural western Massachusetts, and the urban shop in the frenetic streets of New York’s Chinatown – the Blue Rock and Sun’s share something in common:  small, locally-owned and operated businesses, providing quality products and superior customer service.

Yes, these places still exist…and they will exist as long as we take the time and effort to patronize them, rather than taking the easy way out of grabbing shoddy goods at ‘convenient’ one-stop-shopping complexes, at discount prices. If  9% unemployment and 25% underemployment and a generation of outsourcing have show us anything, it is that we can not keep running to the cheapest providers of standardized goods for our consumer needs…it is time to demand healthy local economies, quality goods, and customer ‘service’ that doesn't come in the form of a scripted call center message and pressing phone buttons for twenty minutes.

Rather, good neighbors - with their lives and hearts invested in good businesses, who participate in and contribute to their communities – these must be the economic future of our society.

[This is the second in a series of posts on Small Business in America] 


Tuesday, September 27, 2011

Candid Trader predicts coming Economic Collapse...

And I just have to add, when it comes to Goldman Sachs, I've said this before right here on this blog:

Goldman Sachs Fradulent History

Thursday, November 26, 2009

"How Many Days to America? - A Thanksgiving Story"

My children range in age from 13 to 24. In their younger years, one of the traditions in which our family faithfully engaged was the evening reading of books together before bedtime. "How Many Days to America? - A Thanksgiving Story" (authored by Eve Bunting and illustrated by Bev Peck) was a traditional read in our home - a home that was rather unique, as our six adopted children had widely varied backgrounds and 'personal stories.' The book does not recount the Pilgrim's tale, but tells the story of a Carribean family's efforts to come to America in modern times via a small boat to be "safe and free." It is a book I was never able to finish (as my children still remind me), because my eyes would well up and my voice would crack and I had to put it down.

The Immigrant Story is one that touches the very essence of my soul. Oddly enough, my own family has been here since the Dutch landed in Nieuw Amsterdam (New York) in the 1600s...but there is something about the human desire for freedom that resonates very deeply within me. Whether it was Dutch traders looking for a new business venture in the New World; religious refugees in 17th Century Europe; victims of the Irish famine, the Scottish Clearances, or the 30 Years War that ripped apart the German lands; Haitians fleeing the most impovershed and corrupt nation in the western hemishphere; Russians looking to taste freedom for the first time in their lives; Jews seeking a new start upon the liberation of Buchenwald; the forced travels of African slaves, Native Americans on the Trail of Tears, or the expulsion of the Acadian French; or Latin Americans seeking a just rule of law and better opportunities...the immigrant experience of leaving everything known and familiar and seeking to carve one's own place in peace, freedom, and prosperity is one of humankinds' most astounding and emotional stories.

And so, on Thanksgiving, I am doing much soul-searching, and offering much thanks for my nation...and also soberly recognizing the threats we are under from both the socialist left and the theocratic right. Having been involved in political battles my entire life, I don't believe I have ever seen this nation so divided and so 'under siege' from within as well as from without. Even the riots and political divisions of the late 1960s, through the Kent State Massacre and the Watergate era seem to pale in comparison to the current regime's power grab throughout the economy and the strident, shrill opposition being commandeered by Neo-Puritans on the far right.

It gives one pause. It strengthens Resolve. And it spurs one on to new adventures in the reclaimation, preservation and expansion of Freedom.

Stay tuned for a coming announcement...

Saturday, October 31, 2009

GDP up 3.5%? Obama's Hollow Cheerleading....

Apparently, we're supposed to pop the champagne corks and celebrate: GDP is up 3.5%, the recession is over, and the Recovery has begun. At least that's what the prObama Media outlets and White House are telling us.

My ECO 101 students could do a better job analyzing that statistic than most of the talking heads currently reporting it.

GDP (Gross Domestic Product) is a measure of all the goods and services created within a society's economy. Due to the work of noted Economist Arthur Okun, we know that GDP and Employment move in the same direction: when Employment increases, GDP increases, and vice versa. After four or five quarters of negative GDP, an increase of 3.5% would normally be a welcome sign. Except in this case, the figure is highly deceptive and manipulated, for the following reasons:

1) While GDP increased 3.5%, Consumer Spending - purchases by you and me - decreased by .5% AGAIN. In other words, the increase in purchases of goods and services did NOT come from "the people." Our spending fell. Rather, this spending came from the Federal Government as it purchased flashy orange signs to erect around the country proclaiming that our tax dollars were at work.

2) This additional spending was a one-time shot in the arm by the government. Does the White House and Congress expect to authorize 787 Billion every quarter to keep that up? Much of the increase in spending was in the "Cash for Clunkers" Program....which is now over, and which did not create a single job anywhere.

3) The White House claims that One Million jobs were saved or created through the stimulus. Since the stimulus was 787 Billion, that amounts to $787,000 tax dollars (not including future interest) spent per job. I would rate that as a FAILED effort.

4) The White House also claims that most of these jobs were in Construction and Education. How jobs are considered highly seasonal, and when these workers lose their jobs in the winter, they are often excluded from the unemployment figures, which are usually presented as "seasonally adjusted unemployment" figures. The White House is now *counting* these jobs when they are created to credit the Stimulus Package, but you can bet these job losses will be *excluded* when the winter unemployment figures are released because they will be 'seasonally adjusted.'

5) Education, while important, doesn't create products or jobs. Saving jobs in education may ingratiate Obama to teacher's unions, but this sector does not create products or create wealth in the economy as other sectors do. It is no surprise that while GDP increased, Unemployment increased to 9.8%, and most economists expect it to hit double-digits this month - a month when pre-Christmas hiring would normally reduce this figure.

With unemployment increasing and consumer confidence and purchases falling, the 3.5% GDP increase is a make-believe number based on the Federal Government maxing out it's credit cards with few places left to turn when they come due.

Saturday, January 24, 2009

Spending vs. Saving: Washington's attempt to cure a Hangover with more Booze

The current economic recovery proposal before Congress is a mixed bag, and attempts to use Reagan's formula: marry Supply-Side tools (which appeals to Republicans) with Fiscal Policy Tools (appealing to Democrats) in order to forge a grand coalition to pass the legislation.

Fiscal Policy liberals have traditionally relied on spending borrowed government money like a drunken sailor. The idea is that if the government spends money on projects, it will employ people, putting money into their hands, and enabling them to purchase goods...which in turns increases factory orders, and increases employment. The problem with this, of course, is that when government borrows money, it borrows from HUGE institutions that have HUGE amounts of dollars to lend: Credit Suisse, Lloyds of London, China, the House of Saud, and other wealty entities. As American citizens pay the interest on these borrowed funds (now amounting to 20 to 25 cents per tax dollar paid), we transfer our wealth from the American citizens to these huge institutions.

Supply Siders have traditionally felt that the way to stimulate the economy is to help businesses directly, the notion being that these businesses can then afford to hire people, pay them, and kick-start the economy from the business side.

Thus, investing in infrastructure improvements appeals to both sides: Fiscal Dems love spending money on projects, and Supply Side Reps like making the transportation of goods and services less expensive for business. Hence, Obama's initiative in investing in Infrastructure.

Meanwhile, both sides are negotiating tax cuts, tax rebates, and money giveaways for consumers and small businesses.

Now...I am 100% in favor of tax cuts, too. But the problem here is that Washington is favoring tax cuts for all the wrong reasons.

Current thought is that if "the people" have more of their own money, they will spend it freely, thus stimulating the economy. But this is like attempting to cure a hangover by encouraging the drunk to drink more alcohol: yes, it may deaden the pain, but it doesnt cure the problem, and in fact, only makes it worse.

For years, "savings" has been a dirty word to Fiscal Keynesians. In fact, in economic jargon, they call savings "leakage," because it represents buying power that 'leaks' from the economy.

Let me suggest that one of the root causes of our current problems is the attitude that consumers must buy more, more, more and not save.

Consumers, with the encouragement of Washington politicians and the Federal Reserve, have purchased homes and cars on credit, with reckless disregard to their ability to repay. During the recent credit crunch, a spokesman for Detroit actually cried, "People can't get loans to finance cars!"

And just when did the ability to get a loan become an inalienable right?!

People have bought beyond their means, used credit unwisely, and bought into the 'buy-buy-buy' notion. The average American now spends more than they earn each year.

Yes, we are in a recession. Yes, it is deep, and will get deeper still. Yes, it's going to hurt. But it's not unprecedented: we have had 26 recessions in the last 150years. It is a naural downturn in the business cycle. Rather than insisting that Americans continue to drink at the well of non-stop consumption, it is time for us to bear the hangover and come out stronger.

It is time to begin saving again for our futures.
Time to increase pre-tax 401 K contribution limits.
Time to make Pre-Tax Medical Savings Accounts available to ALL Americans, not just the self-employed and government workers;
Time to value savings and individual nest-eggs over constantly spending and then asking the government for help when the funds run out.