Small business are taking a big hit right now. Things haven’t exactly been “good” for them over the past year, but now things are even more dire. Money is tight, consumers are watching their spending and they do not have the access to the credit they may need to stay afloat.

It was only a matter of time before this impacted me. Monday night I got the call. Bobby’s was closing. Bobby’s is a local bar. It is sort of our preferred hang out. It was our “Cheers” if you will. I was floored. I couldn’t believe the place I have spent many evenings and met many friends, wouldn’t be there anymore. I guess I really should have seen this coming. Things have been slower, but not dead. We had started this whole monthly theme night routine. It was bringing in tons of customers and being quite well received. However, they canceled our last theme night last minute. I offered to revamp their outdated website (it is at least four years old) for a pretty basic fee, and they said no. I just figured they were watching their budget. Evidently, things really were much worse.

Yes I know it was just a bar, and it isn’t the end of the world that it is gone. It is just sad that our meeting place had to close. There is also a bigger impact. I am friends with many of the employees. Now, they are out of work. My good friend runs a DJ/Karaoke business, and he had three shows a week up at Bobby’s. He was just as caught off guard by the news. Now he is scrambling to find replacement shows to make up that income. More personally, I work with him at those shows. So that means my weekly income will also take a hit. Granted, it isn’t my “main job” but that little extra money made making ends meet just a little easier.

My friends who worked at Bobby’s are now unemployed, my other friend now has to find news shows, and we all have to adjust our budget and spending to accommodate the changes in our lives. Finding a new bar to “hang out” at is the least of our issues. Now I'm left to wonder what business will be next?

]]> http://www.culturefeast.com/bad-economy-woes/feed/ http://www.culturefeast.com/economic-crisis-may-be-good-for-something/ http://www.culturefeast.com/economic-crisis-may-be-good-for-something/#comments Thu, 30 Oct 2008 15:12:23 +0000 Lisa Pawlowski http://www.culturefeast.com/?p=1621 Over the summer, back when everyone was more concerned with the price of gas than the government deficit or the economic health of our country, I stood behind a woman at a cashier cage at a Wal-Mart gas station. The thing I found remarkable was that, while the lady was dressed very plainly in her nylon knit pants and black, soft-soled, service shoes, she had a Louis Vuitton purse hooked on her arm. The bag looked large and expensive and I studied it closely to see if it was counterfeit. After all, the woman didn’t look wealthy and a bag like that can run, I’m told, around $1000.

As far as I could tell, the purse looked like a real Louis Vuitton. You see, I had plenty of time to study the handbag. The woman in front of me kept trying to pay for the gas with credit cards. She handed the cashier three different kinds only to be told by the man behind the counter, “The card company tells me I should confiscate it.” And he chuckled lightly as he handed the last card back to her.

Behind me, the line was starting to grow and I heard the angry sighs of people growing impatient. Finally, the lady said, “Will you take a check?” Amazingly, the attendant said, “Yes.” I thought to myself, there is no way I would take a check from that woman. Her finances have to be a mess. And yes, I can’t deny that I did feel smug satisfaction when I pluncked down cash for my gas after she left.

The woman in front of me wasn’t unique by any means. The American consumer, like our government, has been on a spending spree the past few years. We’ve all felt like we deserve very expensive things whether we could afford them or not. Designer bags? Flat screen TVs? Escalades and Hummers? Of course! Credit’s cheap and plentiful.

Our sense of entitlement has led us to a dark place and shows like Bridezillas (hideous women planning elaborate weddings they can’t afford), MTV’s Cribs (recording artists living in lavish homes-some of them can’t afford their houses, either), and movies like Sex in the City (featuring women friends going on designer name shopping sprees) are like consumer porn for the masses. We see people around us buying everything they want and we start to think, “Hey, I work hard, I deserve what I want and I want this.” There’s nothing wrong with buying your heart’s desire. The problem occurs when you can’t pay for it.

Now, quaint words like saving, budget and frugality are starting to make a comeback as people realize the era of easy credit is coming to a close and dark days are ahead. As painful as this economic crisis is, it will make people learn to live within their means.

I’m not a fan of the government having to bail out our Financial Institutions. I believe that this could have been avoided if better choices were made, and our government admitted we were in trouble long before it became the current mess. Normally I would be against the government using tax payer money to come to the rescue of financial institutions. However, I’m completely aware that without the bail out, our Market may fall further into disrepair.

So how does this effect the average American? Okay so let’s say my back folds. Back when the stock market crashed in 1929, I would have been screwed. The banks did not have enough money, and people panicked and withdrew all their funds. If you didn’t get to the bank before they ran out of money, you were out of luck. Because of that mess, Congress created the FDIC in 1933. That means that my money, up to $100,000 per institution, is insured.

Let’s be honest, most of us will no have more than $100,000 in any particular bank. That means that we don’t need to run out and withdraw all our money, like some people think. Others know about FDIC, but think that the coverage is unlimited. They don’t know about the $100,000 limit. At any rate, our money will probably be okay.

What worries me are the business that have more that $100,000 per institution. They are at risk. These are places where people work, and places you do business every day. If they cannot access their money, or gain access to more credit, there could be trouble. Of course there is the stock market. This is a scary time for investors. Retirement Plans, 401Ks, and all things investments are looking scary. I had a friend refer to the NYSE as looking like a Kmart Blue Light Special.

In a way he’s right. Everything is way cheap right now, but the question is can you find the treasures? If you have the money, and you pick the right stocks, you might actually come out ahead when the market rebounds. That might we a while, so it could be some time before you know how you fare. People who already were invested, are wondering about their futures. Will they be able to retire? Will they have to change their plans? It is a huge mess, and the less informed people are about the situation, the more dangerous it becomes.

]]> http://www.culturefeast.com/knowing-about-your-money/feed/ http://www.culturefeast.com/a-laymans-questions-about-the-us-economy/ http://www.culturefeast.com/a-laymans-questions-about-the-us-economy/#comments Sat, 11 Oct 2008 04:07:23 +0000 Daniel Dessinger http://www.culturefeast.com/?p=1536 Every day, I'm reading of stock market losses. 200-500 point losses each day. This cannot be good. And yet, I must admit I don't understand the how and why of it all. And I don't really have time to do the research necessary to grasp it well.

Before you judge, I am very busy with work, baby, and family. I get maybe an hour to myself each day when I'm not in traffic, and I typically let myself watch a show i've missed on Hulu.com. So I have a few questions that hopefully some of you economy pundits out there can explain to me. They're very basic questions, but questions I bet many people don't know the answers to.

1. Why does the stock market keep dropping each day? I understand that the $700 billion approved can't just be applied overnight. I've heard that companies cannot get loans right now. Is that what the continued drops are all about? The lack of loans?

2. What will/could happen to the economy as the $700 billion is applied? Will that actually change the direction we're heading?

3. Why aren't more people talking about peak oil? America seems so vulnerable right now that it concerns me how few people know anything about oil except whether the price per barrel is currently up or down.

4. What is the technical definition of a recession? Is that where we are presently?

5. What is the technical definition of a depression? What does it take for the U.S. to go from recession to depression?

Comments are welcome.

Capitalism Presumes Risk
The very nature of free enterprise presumes risk. You are free to do your darnedest to create and build a successful company. You willingly assume the risks and rewards that come from such an endeavor. That's how it works. That's the only way it works.

Along the way, your company may grow to employ hundreds or thousands of people. You have then supplied hundreds or thousands of jobs. Good for you. Families are fed as a result of your entrepreneurial vision. But what about when your business fails? Hundreds or thousands of people lose their jobs. Investments in your company are lost. Why doesn't someone bail you out? Maybe because it's your company. Maybe because no one owes you anything.

But think of all the people who will be affected by the losses! Yes, think of them. But think of them when you are in the process of building the business. Think of how every action and decision you make affects the lives of other people. Think about how you can bless or curse your city by the way you handle your business. And realize that the responsibility of these effects lie squarely upon your shoulders.

But the entire country will suffer if this business fails! Yes, it could and very possibly would. That is the price of success - influence. You grow, you influence. These aren't new principles. And if the country is leaning too heavily upon unsound businesses, the country deserves every bit of trouble it receives when those businesses fail. Make no mistake about it, there is a consequence for every action. Consequences are not to be feared. They are the great equalizer and stabilizer. No, don't fear consequences. Rather, fear ignorance. Fear foolishness. Avoid them at all cost. Take more time to evaluate the companies you invest in. Ask more questions. Do more research. Evaluate each business from a moral and ethical standpoint.

Bottom Line: Know what you are getting into. If you make a mistake, accept your lumps and move on. This is the natural course of things.

The United States government has no business in business. They set rules and regulations. They do not rescue poor business models. To do so is to cross a line that will have terrible effects years down the road. The short and easy route to bailout does not seem logically sound. It is the reaping consequences of actions sown that affords us the insight, understanding, and motivation to live differently.

If you want a government that controls the fates of businesses, take a look at communism. I hear it's really successful and awesome.

According to LifeAftertheOilCrash,

Peak Oil is also called "Hubbert's Peak," named for the Shell geologist Dr. Marion King Hubbert. In 1956, Hubbert accurately predicted that US domestic oil production would peak in 1970. Source#1 Source #2 He also predicted global production would peak around the year 2000, which it would have had the politically created oil shocks of the 1970s not delayed it for about 5-10 years.

There is a finite amount of natural resources. Al Gore will tell you that. Oil won't last forever. Even the optimists are only promising 40-60 years remaining. Peak oil is when it oil production flows best. It is the period of prosperity before the economic plunge. Once over the hump, it's a downhill slope into a brave new world.

I'm not trying to scare anyone with this article. I hope it will wake some of us up. I was woken up recently to the reality and have been conducting research and strategizing ever since.  

Here's what the optimists don't tell you: While production may continue for 30-60 years, the easy and cheap oil has all been found. Oil recovery will only become more difficult and expensive as we pursue the hard to reach or hard to filter oil resources remaining.

Add to that problem the reality that consumption increases exponentially each year. China alone will double the need for oil within the next 20 years.

What does that mean?
That means billions more resources are needed and production is on the decline. That means we as a planet will need more oil than we can produce to maintain life as we know it. That means demand exceeds supply. That means we cannot maintain life as we know it. 

President Bush's advisors are aware of this. He knows that oil is limited. He's stockpiling it for our military as we speak. In the meantime, Iraq is one of those regions that could produce much more oil if only it were politically stable. With resources running out quickly, it's an absolutely necessary move to stabilize the Middle East.

Now, having said that, I realize that even stabilizing Iraq will only delay the inevitable oil crisis by a few years. But we all press on to live longer and survive longer despite all odds.

Technology has not developed at the rate needed to save the day. We are headed for an energy crisis. Life as you know it will not be the same in as few as 3 years or as many as 15 years. We won't have to completely run out of oil before our economy will crumble. All it takes is the 3-10% reduction in production each year as we slowly run out of oil, tripling or quadrupling the price of oil and fuel each year. Within a few short years, life will be different. 

In this one aspect, Bush was acting on his best belief system and doing what he can to preserve our economy. Right or wrong, it was at least understandable. All of our lives will be different as oil goes away.

We are in an energy crisis, people. Burying your heads in the sand because you think you have 30-40 years left (without even confirming that statement) is unacceptable. And rather than focus on someone to blame for our consumption and lack of future natural resources, let's press beyond our comfort zones and conduct responsible research to learn how we can each best prepare as this energy crisis deepens.

That being the case, I am confused by many similarly minded individuals rejecting any kind of green technology.   While I may agree that the climate “crisis” is by and large a lot of hyper inflated nonsense, I have no philosophical qualms about supporting green technologies.  The beauty of capitalism is that if a product or service is better, it survives, if its inferior, it gets plowed under. 

Green tech has a lot going for it, and a lot against it.  Let the market decide the fate of green technology, and leave all of the politicking out of it.  What we absolutely DO NOT need is a whole lot of red tape corralling us into using green technology.  There is no quicker way to destroy a great idea than to remove it from any form of competition. 

Michael mentioned in his post the fact that the mercury and nickel in many of today’s green tech will do far more harm than good, and he’s right.  The solution to that problem is to continue to expose that industry to market forces.  The market will figure out that using toxic substances in its products is not good for sales, and will work out a solution. 

My fear is that the powers that be (perhaps Michaels “They”?) will create a stagnant, government subsidized pit in which nickel and lead filled technologies can languish forever.  Free from the impetus to change that is competition.  All of these attempts to legislate our environmental morality are merely the latest form of the ivory tower socialistic worldview.  That worldview is that we the people are idiots and we need the government elite and the academia to legislate our lives in every conceivable manner. 

The truth is that we the people are much brighter than the elites give us credit for.  We recognize the usefulness of green tech, and we want to be good stewards of our home.  If we are allowed, I feel that our money will speak for us, and a healthy, dynamically improving green tech industry will be the result. 

But for the sake of all that is holy, don’t remove the competition!