Families Cope as Moody’s Downgrades American Economy

Weather Report: The Economy–The Sad, The Bad, and The Ugly (“They!”)

The Sad: “Moody’s Downgrades The Whole Country” by Joe Weisenthal appeared over at The Business Insider (businessinsider.com) this past April 8, 2009. Here are some highlights:

• “The Federal government is still AAA, but every municipal debt issuer is now suspect and shaky according to Moody’s.
• For the first time ever, the ratings agency PLACED ALL MUNIS ON NEGATIVE OUTLOOK (caps ours), a precursor to potential downgrades. Historically, the agency looked at munis individually and considered them to be too diverse to make blanket statements about.
• “But it seems overspending and the hollowing out of the revenue base is a nationwide phenomenon affecting cities and states everywhere.”

The Bad: “The Coming Siege of Austerity” is James Howard Kunstler’s (author of “The Long Emergency” and “A World Made by Hand”) latest Monday morning musing, 04/13/09, via Life After The oil Crash (lifeaftertheoilcrash.net).

In this 4/13/09 post Mr. Kunstler looks to the current promises presented by our (and almost every other) government and gives opinion. Here is some of that opinion:

• “The idea that we’re about to resume the insane behavior that induced the current epochal malaise of economy is so absurd it will only be heard in the faculty dining halls of the Ivy League. And if America is not picking up where it left off eighteen months ago — the orgy of spending future claims on wealth unlikely to accrue — then what is our destiny?”
• “So many forces are arrayed against a return to the previous “normal” that we will be lucky, in another eighteen months, to still find ourselves speaking English and celebrating Christmas. What’s “out there” is a panorama of mutually reinforcing critical problems pertaining to how we live on this continent.”
• “On the agenda in the second quarter of ’09’ are ominous rumblings in the oil and food sectors. Half a year of cratered oil prices have decimated the oil industry and we’re driving at 100=miles-an=hour straight off a cliff into a new kind of supply crisis — even if industrial production and global exports remain moribund. So many drilling rigs are being decommissioned that the oil industry itself looks like its preparing for its own death. Investment in exploration and discovery has withered with the credit markets, and the world may never recover from the year long hiccup in oil industry activity — translation; peak oil is biting back now with a vengeance. It’s peakness will look peakier and the yawning arc of depletion beyond will look steeper and pose a threat to every globalized and continental-scale enterprise in the known world.
• So many dire elements are ranging about our food production system (i.e. farming) , from widespread drought and water table depletion to ’input” shortages (especially fertilizers) to sickness in credit availability, that we’re all one bad harvest away from something that will make Pieter Bruegel’s “Triumph of Death” look like Vanity Fair’s annual Oscar Party by comparison.”

The Ugly (“They”): Everyone seems today, to constantly refer to the “they” that got America into this economic/financial crisis without explaining just who “they” are. It just may be that Mike Folkerth – King of Simple knows who “they” are (mikefolkerth.com) and explains on 4/13/09 in his piece “U.S. Economic History: Short and the Point”:

“… let me explain who “they” are.: “They” are the same people who said that America would grow exponentially forever. “They” are the same people who robbed you of your employment with such agreements as NAFTA and WTO. “They” are the same people who robbed you of your retirement incomes; Social Security, and Medicare with a black heart and a ballpoint pen. “They” are the same people who assured you of safeguards against the U.S. entering recession and depression. “They are the same people who promised in the 1950’s and 60’s that Americans would enter a life of leisure through the wonders of technology”

Until mid-week then, keep your eyes on the horizon as the weathers changing fast.