Tuesday, May 6th, 2008
Despite the debate about whether there is officially a recession, in 2008 many Americans are suffering. Those in the top income brackets are unaffected. But the fuel prices / crisis is impacting all but the super rich in this country.
It doesn’t help to hear that Europeans and citizens of many other countries have long been faced with high gas prices. Or that, people in many countries are accustomed to spending much higher percentages of their incomes on necessities like food and clothing. Any decrease in standard of living is traumatic. The post World War II American dream was that the standard of living would be higher for our children. But that expectation is changing. All change requires adjustments. And the fear and stress associated with financial downturns can have profound effects on health and emotional well being.
As in software or technology implementations, satisfaction and success comes when the impacted people / users / employees embrace the changes. This is not automatic, especially in large scale implementations and projects. The consultants at Noble & Associates Consulting, Inc have found that change is rarely embraced unless change management programs have been put in place.
Americans who manage to still have adequate disposal incomes, are still vacationing. US travelers to Europe are shocked and disheartened by the lack of buying power of the US dollar. Other Americans are just bemoaning the fact that they either have less spending money or that the money they do have does not go as far.
So how can Europe be of benefit to the United States and it’s de facto recession economy? I saw a Managing Automation blog post about increased interest in procuring good, services and workers from the US. Due to close quarters and limited land mass, small cars have been in vogue in Europe. Our automakers are fighting for survival. As US automakers finally get on the fuel efficient bandwagon, perhaps they can sell more cars domestically and internationally. And, as suggested by the “Manufacturers Set to Take Advantage of the Downturn” article, perhaps the laid off engineer or executive should be floating their resumes overseas.
Sandra Noble
NOBLE FINANCES
NOBLE & ASSOCIATES CONSULTING, INC
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Wednesday, April 9th, 2008
Recession is defined as two consecutive quarterly declines in GDP (Gross Domestic Product).
US Fourth Quarter 2007
Financial industry profits fell $104.6 billion annualized. Nonfinancial industries’ profits fell $30.7 billion annualized. Corporate after-tax profits fell $37.9 billion at a quarterly rate of 3.3%. But despite the quarterly decline, corporate profits after taxes are up 3.3% compared with a year ago. And the U.S. economy, as measured by GDP, grew at a 0.6% annual rate, the slowest pace since late 2002.
But the operative word is “grew”. Believe it or not, we have yet to have one quarterly decline in GDP. Companies and institutions are losing money but the overall US economy is healthy and growing.
State Economics
So, let’s move down to the state level. I lived in Cleveland, OH for many years. Ohio has been hit hard by the non-recession. Ohio and other similar high take, high labor union states are losing jobs and population. These states tended to not have had the housing bubble that other states have enjoyed. The high unemployment rates have caused the increase in mortgage defaults and foreclosures. So the mortgage crisis in the country has a greater negative impact in states like Ohio. Housing prices have gone from steady-state to a decline. Hence my friends in the Ohio would find it more difficult to be bullish on the economy.
Personal Finances
Then on a personal level, many are convinced that there is a recession. There has been a significant reduction in the amount of disposable money. Consumer spending is down, at least for me and most people I know. Tears came to my eyes the first time I saw $3.25 per gallon at the gas pump. I have since seen even higher prices. So those of us struggling to make ends meet are at the lower levels of Maslow’s “Hierarchy of Needs”. Our focus is on putting food on the table, keeping a roof over our heads, and having gas in the car so we can get to work and earn a living.
Relativity
According to quantum physics, nothing is real unless it is observed and outcomes are influenced by the observer. This conforms to conventional thinking about what relativity is. It all depends on how you look at it. Two people can look at the same situation and draw different conclusions.
One of the tenets of Albert Einstein’s Theory of Relativity is that outcomes are the same for all observers. However, the theory also indicates that two simultaneous realities exist at the same time.
Reality
So yes, the US economy is still growing, however slowly it may seem. But the other reality is that many people are seeing and feeling a recession in their personal financial situations. And the forecast for many business industry sectors is bleak.
Sandra Noble
NOBLE FINANCES
NOBLE & ASSOCIATES CONSULTING, INC
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