The Adventures of Charlie Champion

There is an old Middle Eastern tale about a poor farmer.

He lived in a  mud and straw hut , with his wife and three teenage daughters.

He owned 3 old camels .

Twice a year, at the Spring and Fall solstice,  he would pack the camels with large bags of straw and wheat.

He would kiss his wife , hug his three daughters, and then he would set off  for the 10 hour trek to the market at Dandalia.

This was a very important trip for the poor farmer, who would hope to sell his produce and earn enough money to keep his family alive for the next 6 months.

Once there, he would join with farmers from all over the Province.

The market would last for two full days,.The crowds were boisterous and the din was deafening, and by the end of the second day, the farmer would count up his meager earnings, repack the now  empty hemp  sacks, and  tie his three camels into a caravan.

The return trip home was always much quicker, because he and Gabor, his young helper could ride the tired old camels.

One morning the farmer awoke and  found his two neighbors waiting for him in the front yard.

They offerd the farmer  bags of straw as additional produce  to bring to market.He could keep 50% of the profits for his trouble. 

The farmer was excited. With the extra money he could keep his family secure and comfortable.

The day before Spring Solstice was  cool, with a brisk gusty wind.

The farmer brought out the three old camels, and proceeded to load his bags of straw, 

He looked at the camels. They were  pretty well loaded, but he was determined to pick up the additional freight from his neighbors.

He arrived at Abmar’s yard and found 8 additional bags waiting for him. 

The camels were  loaded with much argument and posturing.

The farmer and the heavily burdened camels walked to  Fardeneen’s yard

There he found Fardeen and five additional bags of straw.

Loading the camels required a ladder, a makeshift pulley assembly and also a great deal of  discussion.

Each camel in turn staggered as the additional burdem was placed on its back. Their knees trembled, and they shifted unsteadily.

“Well,” said the farmer,” I guess I’ll be on my way.” He shook his head,” I don’t think these camels could carry another ounce of freight.”

Just then, Fardeen’s 12 year old daughter, came running out of the house. She was holding a large straw doll wrapped in a scrap of pale grey cloth. It was 2 feet tall, and had been made by weaving stalks of straw together, then dyed and clothed.

“Daddy, Daddy” she gasped, her arms wrapped around the doll’s body to hold it steady. ” You promised I could sell Esmerelda at the Solstice Market. I need the money to buy cloth for my new clothes.Mother says I am turning into a little woman, and need larger more appropriate dresses.”

He turned to the farmer,” Well ? Will you take  the doll and sell it for my Mindlee?”

The farmer looked at the three ,seemingly unsteady , overburdned camels.” I’m afraid to add any further burder to these camels. They are important to feed my family. I don’t think they can carry another thing.”

Fardeen looked at the farmer. “Come on Hamoken, share the wealth. Give my little girl a chance to get some pretty cloth for dresses. We can’t afford the cloth unless she sells the doll.”

He shook his head. ” I don’t want to disappoint  you but these camels are carrying the burden for our entire community. Let someone else share his wealth. They can’t carry any additional burden.They’ll break down.”

The farmer looked up, and spied the local tax collector approaching from the East.

Tax collector Sninndl looked at farmer Hamoken and smiled. ” I am here on the Governors business. As I’m sure you know, the irrigation project failed due to sabotage from our enemies. We are now  faced with many new poor and starving residents.

It is the Governor’s decree, that a 25% tax will be placed on all new business above last years totals. 

 New business is to buy you a  luxury .That new wealth should be shared with those citizens who have the need.”

The farmer looked distressed.” After the extra cost for a slower trip and paying for the extra market space necessary, it will not be worth anything to carry all this extra weight.”

The tax collector sneered.” The Governor has already been told of this extra tax on your load in our report to his scribes. You will have to carry the load to earn the money to pay the tax, even if it does not pay you very much.”

The farmer’s shoulders sagged. He knew he was stuck. He was being forced to do all this extra work .

He turned to Mindlee and gave her a half smile.” Come on, give me your straw man, if we can carry all these taxes for government giveaways, we can carry a little more straw. After all, straw is so lite.”

He took the straw doll, and placed it carefully on  top of the lead camel’s pile of straw filled bags.

The camel turned its head toward the farmer, and gave him a long sad look.

They heard a crack, the camels back broke, and it keeled over…dead.

The moral of the story.Too much taxation is a backbreaker

TOO MUCH TAXATION IS A BACKBREAKER

The Country, indeed the World is falling deeper and deeper into what sure looks like a Depression to me.

Depression is an economic term as well as a psychological one.

The classic definition of an economic  Depression has probably not been achieved yet, but the incoming effects are obvious to anyone who deals with business and work. Things have slowed down, and are getting slower.

The Psychological effects , at this time, are less obvious but more ominous.

People are becoming short tempered and more irritable.

Nice and sweet are in short supply,  and everyone appears to be  ready to argue about anything.

Our population, especially under age 40-45 is not ready for difficult times.

We have lived through several decades of mild recessions, and quick easy fixes.

Even the dot com, followed by 9/11, was a relatively easy fix compared to the current  morass.

Nice is the operative  hope.

Nasty is the sad reality.

People are worried and stressed, and looking for something…anything to strike back at.

What a sad state of affairs!! 

The economy is bad and getting worse.

We have been in a 12-15 month decline, which is picking up speed, as we slide down a well greased slope into…Deep Recession..Depression .

As a small business owner, I can feel the wheels grind to a halt.

The orders are down 30-40%, and collecting money is fast becoming a fight for survival.

Sadly, most of my economic predictions are  becoming prophetic.

The credit card  alternative to bank credit is proveing to be too expensive. You can not build a restaurant, or refurbish your house using Visa financing at 27-30% interest, as opposed to  bank loans at 7 or 8%. The bank loans do not exist for regular people, and the credit card payments are further destroying liquidity.

Stagflation,STAGFLATION!!!  If you read my repeated warnings of the past 8-9 months, you are familiar with the word.

Stagflation, now the rest of the economists and pundits have picked up on the word and the condition. No Growth! No Credit! Inflation! Stagnation!

One more serious affliction is beginning to hit our society.

I will explain later.

With the Presidential marathon finally over, it is time to return our attention to the economy.

Boys and girls, we are in trouble.

The amount of debt created in the past few months, and the abrupt slow down of the economy leaves us very vulnerable to higher taxes.

The Feds, the States, the Counties, and the local towns and villages are all running deficit budgets, with the bigger the entity, the larger the deficit.

Logic would tell us that if you don’t have enough money to cover your budget, then……. cut your spending. Any fiscal Conservative will tell you that tightening the budget and reducing spending is what “we the people” have to do when we can’t afford our personal expenses.

Unfortunately at this particular junction in history, a very Liberal agenda has hijacked the Country on the Federal, State and Local level in most places.

This philosophy usually fights to keep spending constant, and increase income by raising taxes, as a way to balance their budgets.

At the beginning of what is obviously a fairly heavy Recession, raising taxes even a little bit will wipe out an alarmingly large number of small/ medium businesses, which in turn, will deepen the recession.

This is a no win situation, but our fiscally liberal  friends will not hesitate to raise our business taxes as a way to trickle up stimulate the economy.

Be prepared, trickle up economics in this economic climate is akin to trickle up depression.

Watch out below.

Thats like the annoying “are we there yet? ”

“Are we there yet? Are we there yet?”

The answer is no. NO!

But the free fall is slowing down, and that’s good news.

Unfortunately, once the bleeding stops, we will be faced with a lot of small cuts and a very long slow, protracted bottom, before things start to swing upward.

But for the moment, let us take some hope from what appears to be at least a stopping and  breather.

Be cautious, the bottom can fall  again so sidelines is where  you want to be.

Trickle Up, Trickle Down

An economic bubble by definition is something that is filled with hot air.

When you prick a bubble with a pin, the hot air escapes, and you are left with a flattened, lifeless pancake.

Welcome to our new economy.

The Pancake Recession.

Not too much syrup. now.

Every day I am still reading articles debating whether we are going into a recession, and how deep it will be.

Ring! Ring! Ring!  Wake up!!

We have been in a recession for at least 6 months already, and have been sliding down that inevitable slope for the better part of a year.

The decline began ,as usually happens, a little over a year ago, just as the DJIA was hitting its all time peak.

 The price of houses was beginning to fall, and the pundits and promoters were championing the good times in an effort to insure a successful X-Mas 07, season.

The Holidays were somewhat  O K , but the market began to fall  shortly after New Years, and continued to drop like a rock in a clear pond , and is still searching for its base almost 10 months later.

The lagging market in late 07 was the signal, and the freefall of 08 is the Market telling us Recession is here.

We still havn’t hit bottom, and the World Wide connection is pulling everyone down along with the U S economy.(They can’t live with us, and they sure as h-ll can’t live without us.)

Their dependence on a successful American economy to sustain their own economies, has to be driving our enemies crazy.  They need us . 

How sweet.

The answer depends.

 The World wide financial implosion is not over yet. There are still some new storms that have not yet hit the fan, of  World economic stability.

 Expect the weather forecast to be very turbulent waters ahead. I have mentioned several times, that the spectre of people investing in new commercial construction (restaurants, office buildings, condo renovations etc,) using Visa or Mastercard credit(@ 20-28% interest) instead of conventional bank issued construction loans (@ 4-8.5 % interest) is a sure recipe for disaster.

The dirge of available credit from conventional lenders, is putting an extra burder on an already depleted economy. The cost of  this money will create an unforseen burden on the economy, and result in additional business failures, and ultimately further defaults and the inevitable bailouts  for credit card companies and banks.

On the positive side, the adaptability and resilience of the American people is starting to show.

Americans are beginning to accept the disasters of the past few months, and are slowly beginning to get on with their lives.

The mood while still hurt, angry, and frightened, is stabalizing,,albeit an inch at a time.

IRA’s and 401K’s are down, but mostly these are paper losses.  

Dealing with the practical aspects of a Recession is a distraction. The word RECESSION  is frightening to a generation that has become accustomed to instant gratification, and quick fixes, however; those of us who lived during the Jimmy Carter Stagflation in the late 70’s  understands that we will survive, and eventually things will get better.

Lets hope that our new leaders don’t make things worse.

Recovery is a delicate flower. A little fertilizer will help it grow. Too much  manure could stunt the hoped for recovery and inhibit new growth.

The worst financial crisis since the stagflation created during the Jimmy Carter years .

Stagflation is what we have.