Evenings of Dialogue old posts 4

Monday, March 9, 2009

Consumer price rollbacks?

As we look at the Consumer Price Index, which is an indication of the prices for a “typical” grocery basket of a consumer. The Consumer Price Index is currently falling due to the economic crisis. Many economists consider this as a negative because it can affect the stock market and investment. However, there can be another approach to the reduction in prices. Currently, retailers utilize a 100- 500% markup on goods and services. What this equates to is that a retailer can purchase a blouse for $2.50 wholesale and will sell the same blouse to the consumer for $29.99. That is a profit of $27.50. As the economic crisis continues, retailers are complaining that sales are down. Yet, with the markup on the goods and services retailers should not be indicating that they are not profitable. We have to think of the fact that the same good or service was significantly lower in the 20th century. Consumer prices increased as the income for the Middle Class increased. The prices were based on the ability of the Middle Class to purchase the good or service and the affordability of the lower class was not considered. Well, we are back to the fact that the Middle Class is shrinking and therefore the prices that were considered affordability before are not applicable now. In addition, many manufacturers and retailers indicated that the reason for increased prices was due to the changes in the production process due to the increased use of technology and the costs had to be passed on to the consumer. With this in mind, it is only appropriate that when the cost for the technology reaches the “break even point” the cost should be lowered so that the consumer is not continually charged for the use of technology. This has not been the case. As the economic crisis continues, retailers may need to consider lowering prices so that the average consumer can afford the goods and services.

Friday, March 6, 2009

The sky is falling ...

The stock market is fluctuating daily in a downward spiral. The Dow is down. The S&P is down. There is great fear that the market will crash. While I can understand some of the fear in the market, it is not necessarily relevant to all Americans. When we look at th amount of Americans that actually own stocks and are invested in the stock market, it is not necessarily your every day American citizen. It is the Middle and Upper Class, more so the Upper Class. Thus the ordinary American is saying, “So what!, I am about to lose my house, car and my family is barely eating”. What has not been realized is that the fluctuations in the market and the lower numbers can be correlated with the middle class that are no longer employed. Middle Class that owned stock are selling their stocks to meet their basic needs. This is not being taken into account. We seem to think this is about trading stock and it is not. It is about basic survival. As many stockholders do not have confidence in the very organization that are on the stock market, they are selling their stocks and cashing in their 401K plans to have their own money readily available. The stock market is really a "big show" that is developed to convince Americans that we are in dire straits when in fact it is the companies on the stock market that are experiencing the troubles and why would you buy stock in a CitiGroup or a GM when the stock may be worthless based on the sustainability of the organization. It is basic common sense and not economics. I liken this to Chicken Little and the "sky is falling". In reality, there is a rationale explanation for the stock market decreases that is not being acknowledged. There is the pretense that it based on the fact that people are selling and buying stocks because the are distrustful of the market. That is only part of the truth. It is because Americans are shifting their priorities to meet their new existence of joblessness and homelessness. If you had a choice to keep your money in stocks or to save your home or feed your family, then you will sell the stocks. Also, as companies layoff employees they are selling the stocks as they relinquish all ties to the organization. This has never been mentioned as a potential reason for the lower numbers and it never will be as the "powers to be" want to continue instilling the fear and intrepidation into the hearts of Americans on the economy.

Tuesday, March 3, 2009

Erosion of the Middle Class

There has been a continued emphasis on the Middle Class and how tax cuts and the stimulus package will benefit the Middle Class. With the economic crisis, the Middle Class has been significantly reduced as many wage earners have been reduced from the high five figure yearly incomes to the meager four and low five figure incomes as they join the millions of Americans that are considered the lower class. Many of the Middle Class were auto workers, bank employees, and mortgage personnel that have felt the effects of the financial crisis in America. They have been relegated to the mass of individuals seeking unemployment benefits that barely cover their current living expenses. The Middle Class of the 20th century is not the Middle Class of the 21st century. The dynamics of the Middle Class are change dramatically as many are being forced down the economic ladder to the near poverty level. Many of the Middle Class are facing foreclosures and on the brink of bankruptcy and they try to rebuild their shattered lives in a economy where jobs are scarce. What will happen as many more companies continue to downsize and lay off employees? Will the Middle Class be totally eliminated and there be only two classes … the Lower Class and the Upper Class?

Monday, March 2, 2009

AIG gets another $30 billion

AIG issues a fourth quarter loss of $61 billion dollars. That is in only one quarter. Let’s be realistic. How can a company have losses of $61 billion dollars? In the article listed below, it was indicated that the loss is due to rapid deterioration in certain markets. The explanation for the loss is very vague. The federal government has allotted another $30 billion to assist the troubled insurance giant. However, the monies are supposedly on a “standby” basis, whereby, AIG may not need to funds, yet they are there if necessary. The continued bailout of these companies seems to be rather derogatory. Government is willing to offer bailouts of billions of dollars to these giant corporations that do not seem to be able to achieve profitability. It is like throwing “good money after bad”. AIG continues to have the same board and the same CEO even though the organization has not been able to financially resolve its issues. When the automakers asked for monies from government, there was the requirement that the Big Three needed to provide strategic plans that would demonstrate how they could complete a “turnaround” strategy to make the companies solvent again. In reading the article, there was no indication that AIG needed to provide a strategic plan or that the same scrutiny that was imposed on the Big Three would be utilized with AIG. Why the double standards? Why should AIG get more monies when they are proving that they are not a sustainable organization?

The articles is available at http://news.yahoo.com/s/ap/20090302/ap_on_bi_ge/aig_rescue;_ylt=AnSOLF7vbGVl3TSRyN2KFjlv24cA;_ylu=X3oDMTE5a2oxbDI4BHBvcwMxBHNlYwN5bl90b3Bfc3RvcmllcwRzbGsDZ292dGV4dGVuZHNu

Friday, February 27, 2009

Developing Strategies for Personal and Professional Growth

Developing strategies is not just for organizations, it can be used by individuals, as well. Just as organizations need to develop strategic plans to achieve their organization goals and to maintain profitability, individuals can do the same for their career goals. Many individuals are at a “crossroads” in their personal and professional lives. They are unable to determine the best course of action for making improvements in their professional lives even after obtaining a college degree. For some of these individuals, it is a period of stagnation and for others the opportunity for a new beginning. These individuals can use assistance in evaluating career alternatives, developing strategies to get the career they desire, and knowledge on developing, maintaining, and sustaining healthy relationships both personally and professionally.

While individuals are focusing on their education and careers, many are neglecting their personal lives, which can have a significant impact on their professional career growth. It is imperative for individuals to be able to balance career and family to achieve their professional and personal goals. This balance can be achieved by developing, implementing, and evaluating life strategies that promote individual continuous improvement, a concept that has been relegated to organizations in the past, but when used appropriately by individuals can have a significant impact on their decision-making abilities.

Thursday, February 26, 2009

Like a good neighbor

We hear so much about “why are we helping people that were not responsible in their borrowing?” or “why should I fit the bill for my neighbor?” What happened to the “good neighbor” philosophy, where neighbors were concerned about each other and it was okay to borrow a cup of sugar or to welcome new people to the neighborhood? It got lost in the greed and ambition of individuals as their incomes increased and they realized that they did not need the assistance of their neighbors.
In the good ole’ days, the neighbors helped each other by babysitting providing food and even helping with the bills when there was a need. Now you cannot ask your neighbor for even a cup of sugar without their being a hassle.
The financial crisis is affecting us all, not just your neighbor. Higher prices, lower housing property values, and loss of jobs within the community are not just your neighbor’s issue, but your issue, as well. As neighbors we can work together to overcome some of the issues that are occurring by helping each other while in need, whether it is emotional, financial, or spiritual. Once we get back to some of the core values that made our ancestors so strong, we will be able to see how important it is to “love thy neighbor”.

Wednesday, February 25, 2009

Chris Brown and Rihanna

There has been some publicity and controversy concerning the Chris Brown and Rihanna incident that resulted in Rihanna being treated for injuries at a hospital and Chris Brown charged with domestic violence. While we do not know the details of the incident, we do know that one party did sustain injuries and the other party faces criminal charges. In the time since the incident, neither party has disclosed much information concerning the incident, other than to state that Rihanna is recovering and Chris Brown can not disclose any details due to the legal implications and that he is seeking counseling from friends and family. There have been many opinions expressed concerning the matter from celebrities, the media, and even the general public as to the responsibility for the incident and what should occur. With the incident, Rihanna has maintained her contracts, while Chris Brown has been steadily losing contracts and some popularity. Yet, we do not know the extent of the incident and what caused the couple to become embittered to the point that a physical altercation occurred. Are we right to judge Chris Brown so harshly without due process? Is Rihanna the only victim or is Chris Brown a victim, as well?