The Economy - is it really that bad?

[elevatethis]

I don't usually create any off-topic threads, but after reading yet another front page article on CNN or Fox about the economy being in the porcelain and looking out of my office window and seeing quite the contrary, I wanted to ask you guys what your opinion is of how your local economy is doing.

I work in Charlotte, NC and all I see are new, beautiful homes and condos going up and people driving brand new cars and going out to eat and basically everything contrary to the picture that the media has painted. I realize that this may not be the case for everyone but I personally don't know of anyone doing that badly. Being a recent college graduate, most of my friends have not had problems finding good jobs and many have bought homes recently and are doing very well for themselves. Its not like I'm isolated in a higher class social circle either - the jobs we are getting are all white collar entry level positions in the finance, real estate, and professional service industries but we are all WELL below the $100k/yr tax bracket, that's for sure.

Is the economy really that bad or does everyone just think it is bad because the media says so every single day? The US is still a much better place to live than 95% of the rest of the world. Ask your grandparents about what it was like to grow up in the depression-era and realize that even today, that's about the norm for a lot of other countries out there....

So, relatively speaking, are things really all that bad? $4 gas sucks but its been like that for at least the past decade in Europe...

[Nate]

Great thread and definitely a thread worth following, as I wonder the same thing.

[littleindiangirl]

What the rest of the country sees trickling down now has already been in full swing in Michigan.

The downfall of our major employers (GM, Dodge, etc) has done considerable damage on our economy. It's a major issue for us in Michigan as it is getting harder and harder to find good jobs.

I know several kids my age that were hired into GM for what seems like great pay for a 19-22 year old, but on the flip side, my boyfriends father was "retired" with a package that was only 1/3 of what he was promised 5 years ago.

Around here, a house that would go for 2 million+ anywhere else in the country is available for a measly 500,000- 600,000 dollars. People are losing their jobs every day, and while it is easier for the younger generation (me) to fill the gaps, we are also not getting paid anywhere close to what the people were before us.

Around here, there are more and more houses being put up, but on the flip side, an astronomical amount of foreclosures riddle my area.

Again, great for people like me looking to buy a house, and get a new job... but really bad for the people who used to make the big bucks, and no longer can afford that lifestyle and it directly reflects on our economy in each city.

Cities like Midland where it seems everyone is employed with Dow Chemical or Dow Corning, the goings still good. People still drive countless numbers of imported cars and make good money (even though I do know of some let go's in the past few months), but in cities like Saginaw... not so good. Places are closing everyday and while the officials scramble for grants... the weight of debt has created an avalanche that is slowing down, but by no means stopping here.

[Brimstone111888]

Th economy is doing pretty poorly. Here in Florida the main issue has been people buying houses they can't afford. Then when they go to forclose the house, the value of the house has dropped, so they people can't pay back the morgage companies. This has caused a of morgage company closures and problems within the housing market.

The other issues are inflation and recession or better known as stagflation. Usually with inflation the economy is growing, so it is ok, but now the economy is receding and inflation is still going up. That means people make less money and stuff now costs a lot more. The housing market has also greatly effected the inflation rate. When you go to get a morgage at a bank, the bank gets the money from the Federal Reserve. If the Reserve doesn't have the money they print more, with the end result of inflation. Also the Federal Reserve lends money to the USA at interest, like you would get on a loan from a bank. This instantly puts America into debt.

Now the Reserve has been slashing interest rates, which is what the USA has to pay back. By doing this banks can lower their interest rates, and still make money. This is supposed to spur Americans to spend more.

Gas is $4 a gallon here, but overseas their money is worth more than twice ours, so they are effectively paying half of what we are. Gas used to be $1 a gallon before the Oil Tycoon took over.

[Laooda]

I'm guilty of not following some areas close enough, so I don't feel comfortable giving an overall "educated" answer... but I will tell you what I've noticed... My neighborhood has had a lot, I mean A LOT of homes go up for sale, or being offered for rent, or just becoming vacant in the last year- year 1/2... I spoke with my realtor last week, and she said that property values are down everywhere... it's a buyers market right now. If I wanted to sell and move, as a realtor she'd help, but as my FRIEND... she strongly advised waiting until the market goes back up. Basically my home is worth less now, then it was when we purchased it 2 years ago. Kinda not cool. Let me just throw in that I bye no means live in a fancy neighborhood... but you can leave your doors open, and you get a stern letter from the home owners association if you've let your yard go too long, or your boat is parked on the street... according to my realtor friend, even the up-scale homes are way down...

[elevatethis]

Gas is $4 a gallon here, but overseas their money is worth more than twice ours, so they are effectively paying half of what we are. Gas used to be $1 a gallon before the Oil Tycoon took over.

Not to go off-topic on the economy debate, but I'm not sure that statement is totally accurate...here's a price list dated 2005, I can only imagine that they would be significantly higher now:
http://money.cnn.com/pf/features/lis...bal_gasprices/

[Laooda]

Excellent post Connie and Jeff... Connie what you described sounds very similar to what I'm seeing here in Texas.

[McAdry]

ahh I guess it depends on where you live and what econoic and social background you have. If your in the upper middle to omg wealthy your proably going to be fine for the next six months or so but with the housing market loosing value for the first time in at least the last 50 years if not ever,I see things starting to go down hill faster and faster. Living in ohio and being from Michigan and hear and seeing the effects of the layoffs that are hitting the area shoot over 3000 in toledo in the last two months things are really starting to hurt for you average working family. With the rising price of desiel and gas the cost of food is going to rise significgantly in the next six months to a year. Combine all this with the increased planting of corn for fuel use, wich is causeing wheat to be in shorter and shorter supply you are going to see the prices of your basic breads cereal and everything that needs flour to be made rising steadily in the next year. If we are not in a depression just yet we are in the middle of a strong recession,and since the money that has been made is bascily paper and fictional stock money, with less and less being spent on the infrasturcre of manufacturing the bottom is going to fall out sooner then latter for a majority of us americans. Big business Is sending jobs overseas faster and faster to promote cheaper goods and the rising economic growth and market in places in china and other devloping countries that are where america was 30 to 40 years ago moving forward and there developing ecomony is going to produce many many markets for these products.The rulers of this country that top one to two percent of this country will stay rich so they don't care what happens to the working man of this country they can make their money from anywhere in the world so why put it back into this country.

[Brimstone111888]

From that chart it is $5.79 per gallon/in USD. That is only 3.36 GBP(Great British Pounds). Its almost half of what we pay, but thats because of inflation of the USDollar.

[elevatethis]

So, I guess how bad the economy is depends on who you ask...

If you ask my friends that have finally been able to afford homes in the new, lower market, I'd say its pretty good for them. A lot of real estate people will also admit that the market has been grossly inflated for a long time in many places.

The downfall of our major employers (GM, Dodge, etc) has done considerable damage on our economy. It's a major issue for us in Michigan as it is getting harder and harder to find good jobs.

What has happened in the northern states is really sad...all of the big production jobs moved overseas or companies are being out-competed by foreign entities. A lot of economists blame labor unions for this - american manufacturing couldn't keep up with the wages they had to pay their workers. Pretty simple solution - move operations to places where they could make a profit. These companies aren't evil, they are just doing what they need to do to survive. I think that labor unions were necessary back in the old days but I think they out-lived their usefulness and basically were the downfall of the american manufacturing worker in the end.