J. Michael Sharman
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How bad is it?
Well, locally, home foreclosures increased 365% in 2008.[1] Local property values decreased by 37 percent since 2006.[2] Nationally, home-prices  fell 23.4% since their mid-2006 peak.[3]
Between the real estate balloon popping and the stock market crashing, <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />U.S. households lost $10 trillion in equity in 2008.[4]
Personal bankruptcies rose nearly 34 percent in October.[5] You don't go bankrupt if you have a nest egg to get you through the tough times, but beginning in 2005, our personal savings rate went into negative territory for the first time since the Great Depression.[6]
Because homeowners are hurting, retailers are bleeding buckets of red ink. This is the first time that Christmas sales figures actually decreased since 1969 when holiday sales records began being tracked.[7]
It is estimated that lack of sales forced 200,000 stores out of business in the week between Christmas and New Years[8], and that 79,000 more will close in the first half of 2009.[9]
One of the two biggest mall owners, General Growth, began 2008 with its shares being traded at $38.73 per share. As of December 29, 2008, they had fallen to $1.21. You can expect that pretty soon shopping mall owners will start going into foreclosure and bankruptcy.[10]
The consumer confidence  index sank to its lowest reading since those records began in 1967,[11] and the number of new manufacturing orders fell to their lowest level since that index was created in 1948.[12]
On Christmas Eve, the Labor Department announced that filings for jobless benefits jumped to 586,000 -- the highest figure since the end of the Carter era[13] -- but it's hard for some folks to even go look for work because more than 1.6 million vehicles were repossessed in 2008.[14]
We did not need more regulation of the various financial industries to protect us from these disasters -- a free market working with the standard checks and balances would have done that --but for it to truly have been a free market we absolutely needed more prosecution of the criminal fraud which occurred from Main Street to Wall Street.
Here's how bad we look to the rest of the world:
The Wall Street Journal reports that Prof. Igor Panarin, a former KGB analyst and current dean of the Russian Foreign Ministry's academy for future diplomats, is being interviewed twice a day about his prediction that "mass immigration, economic decline, and moral degradation" will trigger an American civil war in the fall of 2009. Then in June or July of 2010, he says, the United States will split into six separate pieces.
And the bad part is, he's being taken seriously.[15]
Mr. Obama's proposed response is another bailout/economic stimulus plan with a very big price tag. The New York Times says it would be "at least $775 billion".[16]  Bloomberg cites "Obama advisers" as saying the new bailout would exceed $850 billion.[17]
The crisis our nation is encountering is not because we have too little money to work with, it is because we have lost sight of what it means to work as Americans in a free country, and we have distorted free competition by overly politicizing our economic policies.
We need to have the government stimulate innovation, not subsidize mediocrity and corruption.
We need to be a production-based economy, not a consumption-based one.
We should be creating new industries which in turn will create new jobs. Instead, we persist in maintaining old industries doing things the old ways.
We need to be a savings nation, and not have our continuing bailouts increase our national and personal debts.
Ultimately, what we really need to do is to simply remember the last four lines of Samuel Francis Smith's song, "America, My Country 'Tis of Thee":
Long may our land be brightWith freedom's holy light;Protect us by Thy might,Great God, our King!
 
 
 
 
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[1] "Table: Foreclosures Way Up Across Region", Culpeper Star-Exponent, p. A1, January 4, 2009

[2] "Tp Ten Stories of 2008" Culpeper Star-Exponent, http://www.starexponent.com/cse/news/local/article/culpepers_top_10_stories_of_2008/26836/

[4] "Damage Report 2008: Household Wealth Down $10 Trillion", December 12, 2008  http://www.usnews.com/blogs/the-ticker/2008/12/12/damage-report-2008-household-wealth-down-10-trillion.html

[5] Rodricks, Dan "We should have seen the boom couldn't last"
http://www.baltimoresun.com/services/newspaper/printedition/sunday/ideas/bal-id.rodricks07dec07,0,2518011.column

[6] Rodricks, Dan "We should have seen the boom couldn't last"
http://www.baltimoresun.com/services/newspaper/printedition/sunday/ideas/bal-id.rodricks07dec07,0,2518011.column

[7] "US holiday weakest since 1970, more retail cuts seen" Reuters, December 30 2008 http://www.guardian.co.uk/business/feedarticle/8170848

[8] Experts Predict 200,000 Stores To Close By 2009

Dec 30, 2008 http://cbs2chicago.com/local/experts.predict.2009.2.897060.html

[9] Rent-to-own News - Retail: "73,000 stores could close in first half of 2009" December 30, 2008 http://www.rtohq.org/01922apro-retail-outlook-grim-73000-stores-could-close-in-first-half-of-2009.html

[10] MAYEROWITZ, SCOTT "Foreclosure at the Mall: The Recession's Latest Victim Might Just Be That Shopping Center Down the Road" ABC NEWS Business Unit, Dec. 30, 2008
http://abcnews.go.com/Business/Economy/story?id=6544358&page=1

[11] "U.S. Economy: Confidence Sinks to Record Low on Jobs" Dec. 30, 2008 (Bloomberg)

http://www.bloomberg.com/apps/news?pid=20601068&sid=anyyqSyZTU28&refer=home

[12] "Manufacturing Index Drops to 28-year Low: New Orders at Lowest Level Since Records Began in 1948", Culpeper Star-Exponent, p. A6, January 3, 2009

[13] Herbst, Moira "Benefits for jobless workers vary widely across the U. S.",http://www.wtol.com/Global/Story.asp?S=9589282

[14] Hennigan, W.J. "Auto defaults keeping repo men busy"
East Valley Tribune
Tucson, Arizona | Published: 12.08.2008
http://www.azstarnet.com/allheadlines/270474

[16] Calmes, Jackie and Hulse, Carl "Obama Considers Major Expansion in Aid to Jobless" New York Times, January 3, 2009 http://www.nytimes.com/2009/01/04/us/politics/04stimulus.html?ref=business

[17] "Obama Says U.S. Must Act Swiftly to Address Economy (Update1)" Bloomberg.com, January 3, 2009  http://www.bloomberg.com/apps/news?pid=20601103&sid=aeLGXDu_0Qiw&refer=news#