Conservative commentary: Look bad now? Just wait

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— Most people seem to feel the urge to proclaim they are optimists. I think they perceive this as a big plus in their personalities and how others see them. I take a different approach, billing myself as a realist who works very hard to affect a positive outcome. There is a difference, particularly with those who just refuse to recognize objective truth. Ignoring reality is no asset and is, in fact, quite dangerous. This especially is true of the professional politicians we elect, whom I believe are paid to worry for us along with telling us the truth. I also would argue this means having the courage to fight for reforms even if the people don't appear to be ready for them.

We all know Social Security is a looming disaster. In less than a decade, it will be taking in less than it pays out. That pales with Medicare and Medicaid, which already has built up more unfunded trillions than I have fingers and toes, yet we're still adding on. It's a pay-as-you-go system that mandates current workers fund retired ones with a ratio of 3-to-1 and declining rapidly. Unsustainable? What do you think?

Am I scaring you yet? Even with the economy in the toilet right now, it appears the answer may be negative. Apparently, it's just too hard to think about because we've only gotten hit with the 4-by-4 once or twice between the eyes, not the dozen times to make a real impression.

So try this: Take a look at the unfunded pensions coming due in the next few years. And picture your 72-year-old uncle Dave, who has worked all his life for the city of ABC only to get a letter informing him that despite the promises made 30 or 40 years ago, he can just forget them because the money's all gone. Or your mom who slaved away at XYZ Corporation for decades then receives a similar notice in her 60s or 70s. Hey, kids, what do I do now?

Well, if you're not frightened, I am. Talk about class or age warfare. Who are the scapegoats going to be? The young who refuse to be taxed 60 to 70 percent of their income to meet the promises to the retirees? The politicians who didn't do their job raising the alarm (who are now likely long gone)? The present powers-that-be who essentially are powerless because these programs need the magic of compound interest with early funding to meet the obligations?

The answer probably is all of the above, and it still won't do any good. It will be what it will be, and the only attempt at satisfaction will be screaming at the most convenient suspect. There also will be exposes of situations that I've personally witnessed for 40-plus years: UAW workers sleeping six to seven hours of their eight-hour graveyard shift; local politicians playing Santa to the unions demanding "20 or 25 years and out" for public employees as our life expectancy was increasing by decades; rules that allowed a worker's pension to be based on his last year's income where the unwritten rule was to allow everyone to work 100 hours instead of their normal 40 so their lifetime retirement benefit often exceeded their normal income. These all are well-documented and OK - one guy doing that sounds great, at least for him. But thousands or millions doing it will break the city, state or even GM and Chrysler. And it's doing just that. We just haven't been willing to recognize just how extensive it is : yet.

Gary Hofmeister is the owner and operator of Hofmeister Personal Jewelers in downtown Steamboat Springs, a company he founded in 1973. He is a director of the Conservative Leadership Council of Northwest Colorado and a former Republican nominee for Congress in the 10th District of Indiana. He made 1

Comments

JLM 5 years, 2 months ago

What snowbow said! Yeah!

Also, a self directed and funded defined contribution pension plan might be a good idea but don't invest it with anybody named "Madoff".

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ybul 5 years, 2 months ago

I think positive thinking is good. However, realism laced with thinking of how to come out with a positive end will do you better.

The Robin Hood example is good here. Robin hood saw that his government was taking so much from its citizens that he said enough and fought back. He and his men took back the taxes levied upon the poor and returned it to them.

How does placing faith in the government, which bases their solutions to problems on variables that may not exist in the area the problem is in. (ie. in the past building roads has spurred the economy while adding debt, today, it will help in the short term, but will only add more debt that future generations will owe, while facilitating cheap crap from china stocking the stores of wal-mart.

Maybe, the whole model on how we have gotten here needs rethought, in a positive upbeat fashion, at the local level. As opposed to waiting for Obama to fix the problem.

Peace,

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playa46 5 years, 2 months ago

So, Gary, what would you do to solve the problem? Point fingers?

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JLM 5 years, 2 months ago

I have never been to a graveyard and seen a headstone that said: "He was a damn good pessimist."

The Commander in Chief better also be the Cheerleader in Chief or its going to be a long hard slog.

Leaders take followers to places where they would never go absent the power of that leadership. One has to be hopeful even in the most dire of times.

When I was a green 2nd Lt newly reported in and trying to learn the business of soldiering, I remember a Sgt who every time we would go out on patrol would make it a point to come by and ask me: "Whadda think, LT?" I would say, "Don't know whadda you think, Sarge?" He would reply, "Piece of cake, LT."

After a couple of months, when I had learned my job, I would say with no prompting, "Piece of cake, Sarge! Walk in the park." More importantly when others asked me I would say the same thing. I noticed that the troops liked it when they thought I thought it was going to be an easy mission. [I never really did as I was always scared witless. But they didn't know that.]

In his own quiet way, this salty Sgt had given me a good lesson in leadership. Nobody wants to follow somebody who is not at least a bit more confident than they are.

Years later I had a chance to cut the dust and drink a few good German lagers with this Sgt in Grafenwoehr (if you've been there you know exactly what I am talking about and if you haven't it's hard to explain). By then I was a Capt and had commanded three different companies on three different continents but I thanked him for his assistance all those many years ago.

He said, "Yeah, I had gotten tired of losing Lieutenants. They're so hard to train." We laughed.

Tough times don't last but tough people do. And Americans are a tough lot. Everything is going to be OK and at some future date we will all laugh. Now tom'w let's put in a damn good days work. "Piece of cake. Walk in the park."

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Fred Duckels 5 years, 2 months ago

Gary: I share your frustation, in observing our system, that fails to look down the road. The theory that capitalism can only last about two centuries, certainly considers these shortcomings. Voting a free ride is popular. In my business I must look long term, and act accordingly, or face an uncertain future. I'm not sure that I buy the "optimist" view, but the frustrating part is watching our system face up.

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playa46 5 years, 2 months ago

Fred- "I share your frustation, in observing our system, that fails to look down the road."?? Are you kidding me? What makes you think we do not look down the road? We look for better ways to get out of our problems, no more taxes on healthcare, we (hopefully will) get out of a war that simply sends our money down the drain! (In fact, there are two of them!) We look for cheaper, more affordable ways for energy, and we also look for ways to open up new jobs for the unemployed. (The New Deal... yaddah yaddah ya.)

What are you trying to do?

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ybul 5 years, 2 months ago

Jus,

Ever thought that maybe as opposed to social engineering through tax breaks for mortgage interest deductions and IRAs. The govt, should have encouraged people to pay off their debts, and invest in themselves as opposed to a multinational that would outsource their job, or CDO's which helped fuel the mess we are in today?

Maybe that appetite for debt has allowed the Chinese to export the US' mfg base and turn it into a service economy, that does not create wealth but lived off of future income and previously created wealth?

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JusWondering 5 years, 2 months ago

I too am wondering about the optimist view. Quite frankly I think Gary's comments were pretty optimistic compared to some of the data I have been exposed to relating to the future value cost of many of the entitlements that our politicians continue to hand out as favors (oink).

In our President's inaugural address he mentioned that "the challenges we face are real. They are serious and they are many." He was exactly point on but I am sorry simply spending our way out of this is not going to help. At some point our country has to come to the point (just like many us have done with our own personal finances) that it just can't afford certain things and provide real sacrifice.

If we take local governments as an example we can quickly see that irresponsible spending is just as much a part of the problem as the greed of the large corporations (AIG, Lehman, Wamu, etc). In fact, our governmental officials continue to provide entitlements to their own employees that they cannot afford.

As recently as 2007 you could work for the State of Maryland for five years prior to retirement and receive paid medical insurance for the rest of your life (including medigap insurance). These entitlements became very visible with the implementation of the new GASB 43 & 45 accounting standards (http://online.wsj.com/public/resources/documents/DroppedB.pdf) and are part of the reason many governmental entities are facing a budget deficit.

I don't disagree with our President's premise that we should be investing (since when did the word invest become synonymous with spend) in our infrastructure and new energy, but we also have to tighten the belt and eliminate the entitlement mindset. Where is this in the $800b+ stimulus package?

On the corporate side, at some point we have to come to the realization that rich employee benefit plans simply are not affordable in our new economy.

Is our healthcare system broken? Absolutely! Has there been a viable solution presented on either side of the aisle? Absolutely not!

IMHO it is very difficult to be an optimist with more of the same irresponsible behaviours that got us where we are today being espoused as a new idea. At some point we need to realise something that our grandparents did... it takes sacrifice and not "an optimist view". Getting out of this mess we are in is going to hurt; there is no way around it! I have yet to hear one politician really tell the American public this; why? Because they want to be re-elected and our society does not like bad news.... case in point the posts rebutting Gary's commentary.

I would like to continue to be optimistic of the new administration. I like that he angered his democratic constituency on day one... that is a good sign; but allowing pork filled stimulus packages is not going to get us where we need to be.

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JusWondering 5 years, 2 months ago

JLM; I expect my President to be honest.

To say "piece of cake" and "walk in the park" belittle the situation we are in... let's all just go out and get our Staples "easy button" and make it all disappear right?

A good leader knows how to deliver bad news and does it! A good leader has a solid plan to move forward and does not espouse quotes from the latest and greatest Harvard Business Review article on leadership.

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JusWondering 5 years, 2 months ago

JLM,

By the way, how is your 401(a), 401(k), 403(b), 457 or IRA working out for you right now? Are you completely serious that you would want to provide self-directed defined contribution plans? How has that worked out for those that have lost more than $2 trillion last year? Not so well I would imagine. We have failed there... the average American does not have the competence to manage their own investment portfolio. We have forgotten how to balance a check book and you want everyone to manage investments?

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JusWondering 5 years, 2 months ago

ybul,

There are two schools of thought on completely paying off debt. If you pay off debt you destroy money (basic Econ and Money & Banking in an undergraduate program teach us that). Some would argue that no debt creates bigger problems.

On the flip side excessive debt and negative savings (the position we have been in for many years... yes pre-Bush; the guy did his share of damage but all of our woes cannot be blamed on the last 8 years) is incredibly irresponsible and dangerous as we are now seeing. There has to be a balance of using debt appropriately.

I am completely with you that we (as a society) have abused the use of debt.

For private citizens for financing of long-term purchases where the benefit received from the purchase greatly exceeds the term of payments. I would argue that conservatively interpreted this means that the only thing that should be financed using debt is a home.

For governmental entities that would equate to reservoirs, sewer plants, road construction (not maintenance), and other capital improvement projects (not the offset of OPEB liabilities) or the expansion of adminstrative burdens.

I am trying to see your connection of tax breaks on mortgage interest deductions for IRAs to incredibly irresponsible government spending.

I am not so sure that that we can make blanket statements and say it is the appetite for debt that has allowed the US to export mfg to China as much as I am sure it is the pervasive view of entitlements. GM, Ford and Chrysler are not in trouble because they can't build a good car or because they can't sell what they build. They are in trouble because they can't do it as cheaply as Toyota or Honda. Why? Entitlements provided to employees. When something becomes an entitlement it becomes expensive. There is statistical proof (it will take me a while to find sources since it has been a while that I researched it) that once something becomes an entitlement the perception of the benefit becomes negligible to those to whom it is provided.

Growing up we had only major medical health insurance coverage. When we went to the doctor we needed to be seen. Today, admitedly, I will take my kids to a doctor more than necessary because I have a $20 co-pay and can, through my HMO get cheap drugs and cheap tests. Guess I am part of the problem too, huh. Another perfect example; the other day my son accidentally (he's 5 by the way) hit my wife in the head. She had a horrible headache and went to the doctor hoping to get a prescription. The doctor offered to order an MRI! My Dad's "cure"; take a couple of aspirin.

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JLM 5 years, 2 months ago

@ jus ---

Don't disagree with what you say at all. Like everything in life, the issue is proportion and the position of the pendulum. Enough spice to enhance the taste not so much spice that the soup is ruined. A bit of optimism with a bit of realism. Our new President was elected in great part based on "change" --- an inspirational and aspirational concept. Just don't throw out the inspirational gear, that's all.

Defined contribution self-directed pension plans (supplemental to other forms of thrift, mind you), hell yes! For those who can manage their own affairs. That would be me in this instance.

How I have done? Better than most but I have been fully invested for a long, long, long time and have avoided the stock idea de jur and have been skeptical of the current bubble (whatever it is at a given time). I like fee simple unleveraged real estate as a reservoir of value and as collateral to fund varying cash requirments.

I like 8.5% stop loss orders. Why would anybody ever invest without determining ahead of time what loss they are willing to take? It's a no brainer. Take the loss you can stand not what the market forces upon you. A portfolio without stop loss proctection is not "investing". What could possibly be simpler?

I like country ETFs and I like to take profits when they appear. Country ETFs were a great investment vehicle and it became obvious that China was oversold. ETFs are also great for sector plays. While today may be a stockpicker's market, the sector plays are pretty obvious. Was it a surprise that McD's profits went UP? I don't think so. Nobody ever went broke taking a profit. Not for everybody but it has worked well for me.

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JusWondering 5 years, 2 months ago

JLM, Kudos to you I am glad that you have done well. Some of us can weather any market and still do ok(I am up but not as much as you from what it sounds). But this takes work and the average DC participant does not have necessary pre-requisites. To be honest (because I am selfish and don't want to pay for them) I hate the idea of turning social security into a DC plan. What happens when they poorly invest their Social Security because the latest financial news editor has the latest greatest stock pick that tanks. I'll tell you. Those of us that have been responsible, are educated and are frugal will pick up the pieces just as we are now.

I am very optimistic about our country, our economy and our leadership (although I did not vote for them). I absolutely hope and pray that our President can get many of the things he talked about in the latter days of his campaign accomplished. I like that he recognized that it is going to be painful and that it will take years (not weeks/months) to recover. I don't like that he and his Washington friends blame it all on the prior administration. I don't like that he seems to be adding just more bureacracy and pork to the budget. Deficit spending is fine... for a season. In reading through his plan I question whether the expense (call it what it is) will ever go away.

Our situation is something that has been brewing for many years and has been perpetuated by each administration (including that great hero Clinton) I was truly hoping that he would be putting a stop to it (now that we have him).

I just hope the rest of the nation takes it that way instead of continuing to pursue the greatest of the American values... instant gratification.

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JLM 5 years, 2 months ago

@ JW ---

SS $$$ are making no real return. They should at least be making an annual return of the 30 yr Treasuries.

I actually think the big compromise on SS is going to be "opting out" for folks who are willing to go it alone. I am willing to give up all that I have contributed to stop contributing right now. This would be a big benefit for those remaining.

I am sure that young folks don't really want it. The big opportunity is to end it for some folks. Its time has come for the young to end it all. Not for everybody but for some.

I think means testing is OK and I think a willingness to privatize it for some folks is also OK. I object only to the rate of return --- the real rate --- on the funds.

O gets a big free ride on deficit spending for about 3 years and then everybody will discover the virtues of fiscal restraint --- it will be election time after all.

The funny thing about hunger is that it can be satisfied with both beanie weanie and filet mignon. Starvation is not the real result. I have eaten catsup sandwiches with sliced pickles in my life and thought baloney with mustard for dinner was great. I didn't really know any better but I was never even remotely unhappy.

The real intellectual dilemma is that nobody really knows what to do and we all have one year of experience 25-40 times to draw upon. The world is moving so fast that now we really have one month of experience six times.

It's all gonnna work out just fine.

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JusWondering 5 years, 2 months ago

JLM, I read the bill and felt the same way. Can you say oink?

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ybul 5 years, 2 months ago

The desire to take on debt publicly and privately to have our cake today and pay for it later, facilitated the manipulation of the currency markets. Without, the availability to park trade surplus' in US denominated assets, the ability to peg their currency would have been much more difficult. As it would have required them to inflate their currency and investors would have shied away from investing in China.

I agree on the debt, and entitlement society we have today. Though I think that prior to being debt free people should not have been encouraged, by tax savings to invest in the stock market. While another tax credit encouraged debt.

Unfortunately, the current dogma in Washington is that stimulus is going to get us out of this funk. Only when asset values return to a sane level will we begin to move out of the funk. All the talk of a New Deal to help, is insane as almost all historians agree that WWII ended the depression, and many say that government intervention actually caused it to last longer.

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trump_suit 5 years, 2 months ago

Please correct me if I am wrong (Happens alot).

Wasn't WWII just a massive case of Gov't spending and intervention, and didn't it include the nationalization of factories, production lines and finances?

Just a thought, not a recommendation for action.

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ybul 5 years, 2 months ago

Yep, and so was the nationalization in Germany prior to WWII.

The problem is that we have been going to war for years, Bosnia, Iraq, Somalia, Korea, Vietnam. The problem is that the military industrial complex has put a huge mortgage on future generations in doing so. The old argument you can have guns or butter, we have had a lot of both for years.

The new deal programs did not solve the problem. Speaking of a New New Deal, potentially is just going to delay the hangover, and make it worse.

To think that any one man or group of men (or women) can come up with a solution, without unintended consequences is madness.

The question is what can the local community do to work together, to make the problem less painful for the residents of the area? How to create jobs that retain more of the income that flows into the area. New energy technologies, Old business' that have left the valley, etc..

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JLM 5 years, 2 months ago

There were four important developments which impacted the end of the Depression and which were caused by the War:

  1. One of the most important developments in WWII was full employment. All the men were off fighting and the women went to work in the factories. The racial divide in America disappeared in the workplace --- though arguably not in the hearts of folks --- as every able bodied man and woman had work to do. Wages were not great but everybody was working. Today we are facing massive unemployment even in time of war. Big difference.

  2. The other important development was a mandated level of the "good life" caused by rationing. Do you know that one could only get 5 gallons of gasoline per week? And almost no tires. Americans freely accepted a substantially lower level of the quality of life because of the War. Today we are not willing to yet even contemplate even a temporary reduction in what is a very, very, very high standard of living --- case in point those rubes @ Citi buying a new $50 FRENCH jet!

Guns or butter? Hell, we're at guns AND filet mignon with Bernaise sauce! We have forgotten the concept of doing with less let alone doing without! We are spoiled! But we will learn.

  1. We became great manufacturers. We built huge amounts of war material in a very short period of time in factories which became models of manufacturing efficiency. We became great manufacturers and rode that wave thereafter to create a great materialistic society. Do you remember when a family had a single TV?

  2. We became great builders. We could construct airports with 4-6 long and wide runways in 90-120 days. We could build entire military posts in 90 days. This building technology gave us Levittown which became mass produced but high quality housing and ultimately became the underpinning of widespread ownership --- in great part why we are in trouble today.

The reason these things are important is because the privitations of the Depression contributed to the recovery after the War. Today we have almost nothing left to contribute (maybe the technological advances like paperless medical records) to the recovery and therefore the recovery is going to take longer.

Today I read the stimulus Bill (647 pages but pretty easy reading) and I am very, very, very discouraged. It is just a huge funding mechanism of every conceivable liberal program with lots and lots of zeros.

I have spent the morning calling folks I know who are in enterprises which may benefit from the spending and suggested they read it and get their grant writing materials together because we are getting ready to see one of the greatest feeding frenzies in the history of mankind. New jobs? Not bloody likely!

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JLM 5 years, 2 months ago

@ jus ---

The magnitude of the pork is so enormous as to literally be beyond the ability to comprehend. I cannot imagine how someone could come up w/ such a Bill in such a short period of time. I am really, really, really scared because we are now spending the rent money.

For the first time I am beginning to worry that Pres Obama is not as smart as I have thought him to be. In my personal experience I have always been surprised to learn that a well educated lawyer or doctor knows next to nothing about business --- to say nothing about job creation!

I am scared and I don't scare too easy!

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JusWondering 5 years, 2 months ago

So much pork that it is difficult to find the less than $100b in real job creation. It is NOT fast acting. It is more of the same and "investment" in very intangible projects.

Don't get me wrong, I am all about investing in education and research (personally I have three post-graduate degrees in various disciplines) but the ROI on it is years down the road.

The current condition requires "investment" in initiatives that provide immediate and certain relief. Initiatives that would dust off the US industrial and technological machine (not research based) and not be a "throwing out of the baby with the bath water". I was horrified to learn that with all of the talk about investing in infrastructure so little of the package actually "invests" in infrastructure. It just looks like a long list of pet projects and payback for support over the last 24 months.

As much as I do not want to hear "I told you so" from my more conservative friends I am fearing that this President just may be a wolf in sheep's clothing.

Double digit unemployment is likely inevitable.

Respectfully,

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JLM 5 years, 2 months ago

It funds things which have no potential to EVER create a job.

It replaces capital which would othewise have an alternative and viable source of funding. As states and non-profits are reaching for their own wallets, "Let me get that check for you!"

It is a long, long, long list of incremental funding for governmental agencies in which an existing government employee is simply going to add a zero to the existing funding basis and no jobs will ever be created.

It is a political payoff for every Democrat who supported the President O effort.

Wolf in sheep's clothing? How about a sheep in wolf's clothing? There are no teeth in this Bill. There is only pork.

How well has the first half of TARP worked thus far?

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ybul 5 years, 2 months ago

JLM, as you seem to support the Military lock stock and barrel. Why does our military have a base in Thailand paying my cousin 80k to preform a study on aids?

What are the solutions, George Soros, said Wednesday that the fundamentals of today are worse than the fundamentals prior to the great depression.

The banking system got us into this mess, why with 80 trillion in outstanding Credit default swaps do we stand steadfast behind propping up citibank.

Maybe as opposed to too large to fail, in this case it is simply too large. Maybe the monetary system needs to go back to one that is not manipulated. But that tends to benefit the wealthy, so that will not occur. Maybe the fed should be owned by the tax payers, not the rothchilds, rockefellers, etc..

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JusWondering 5 years, 2 months ago

ybul --- are you really using George Soros as an expert source? Really? The only reason he has any credibility in any circle is because of his greed.

This is the same man that equated the Bush administration to the Third Reich... I am sorry but the two are not synonymous. Bush was not the greatest thing for this country, but he was no Adolf Hitler on any front!

The problem does not just go back to credit default swaps or any other part of our banking system, they were a mechanism after the fact. Economists will be spending years to come trying to figure out where it all went wrong; but I am guessing (yes guessing) it will come back to the extension of credit to people who could not afford it in the first place and the Federally mandated rules that sought to help people that had NO BUSINESS purchasing a home get one. I am sorry, I don't care who you are it is simple math that someone making $35,000 a year cannot afford a home that costs $250,000 unless they have a significant down payment (like half). It is going to catch up to them. I remember my Dad telling me when I was young that I should never buy a home that was more than 2 1/2 times my annual income and expefct to put 20% of the purchase price down. Seems to me that if we all followed this rule we would not be having this conversation at all.

There are similarities to the Great Depression that is for sure, but the fundamentals (define them please) are not the same... many of the "fundamentals" were not even tracked then.

From my view, we have yet to see the carnage in Routt County!

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JLM 5 years, 2 months ago

ybul ---

Ask your cousin. I am opposed to pork in all locations including the military.

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ybul 5 years, 2 months ago

As opposed to Soros, how about buffet, Buffet stated that CDS's were the fiscal equivalent of a nuke. There are 700 trillion of them most not owned by bondholders.

Yep, the people that owed the money were the impetus, for the fall. However, AIG needed to be bailed out because of the credit swaps.

I agree on not having seen it yet in Routt, and as opposed to beating each other up as to what happened in history, what can we do to lessen the impact locally, as I do not think there is a snowballs chance of the feds helping the situation.

As far as the fundamentals, The US is a debtor Nation and a net importer. Figuring out what could be done to retain any wealth in this community that comes in might be a good idea. Any of your degrees help out with that JLM.

Heck putting a micro dairy on Howleson in the summer utilizing the snow making equipment for irrigation has been going through my mind. Probably could have 10 cattle there in the summer, make camembert cheese and have an additional reason to come to town. Food is high on reasons to travel, cheese is becoming bigger than wine in some areas and 20 cows seasonally can provide a decent living for an individual.

What else could be done to enhance the tourist experience and allow the retention of more tourism dollars within the community?

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ybul 5 years, 2 months ago

JLM, The real question should have been do we actually need the base in Thailand, or the 200 other foreign locations? Maybe, as opposed to worrying about the rest of the world, we should worry about taking care of our home.

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JusWondering 5 years, 2 months ago

ybul. AIG - being intimately familiar with them they had much bigger problems than credit default swaps. That was symptomatic of their management style throughout all level as did WAMU. Wachovia and Lehman on the other hand, agreed that was their major issue.

Not a bad suggestion on the dairy farm (although I would argue against high-end cheese)! Routt County is going to have to produce something besides tourism to survive though. If you look at many of the popular tourist destinations of the 20's (using a comparison to the last economic impact of this magnitude) many are still trying to recover to their glory days. Many of the mega-mansions have been turned into museums while others were torn down. What if (and this I would argue has almost happened) skiing gets to the point where only the rich can afford it? When a day skiing costs more than a day's wages people will begin to re-consider it. Will it be that dream vacation or will the American taste change?

Historically looking at Colorado, any time we have experienced the brunt of any recession it has been because we have not been diversified amongst industries. The only reason our State as a whole has not been hit as badly as others so far this time is that we have a much more diversified economy than most other States (that and we do not have a lot of government mandated socialist programs; I think we can thank TABOR for that).

What would happen to the 'boat if Intrawest simply said "we're done" and closed it down. Just look to the neighbor to the South (Stagecoach) to see the impact. I recognize the situation was different, but the impact the same. It would be devastating. Sure Smart Wool and other industries could absorb some jobs, but if the resort closes I would assume that people are not buying as much thermal underwear at $65 a pair either. I know this is drastic, and it is just an illustration, but I think it has value. It would not be the first time an entire industry collapsed or shrank.

The short of this Routt County needs diversity in industry if we want to have a thriving economy that is "recession proof" otherwise we are at the whim of the over extended public (the uber rich cannot buy enough t-shirts to support our current infrastructure).

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ybul 5 years, 2 months ago

I wholeheartedly agree on the need to diversify. I think skiing will draw the Chinese, in conjunction with the western lifestyle. Though they will not buy condos, and inflate housing prices.

Having run the numbers on the cheese thing, the high end cheese pays a white collar+ wage with small numbers. Though the process could be ramped up to provide a home delivery based dairy, which I have also been investigating. Though I am only one person with two others working with me and we are getting our foundation under us again. But this year looking into wheat, small scale produce, and long term biodiesel.

Tourism will still play a component in the future, the question is how to leverage what exists here to complement those assets, without harming them.

Another hair brained idea, is taking the cow crap I drag every spring, putting it into a retaining pond with an algae culture. Press it and make biodiesel (reports show 5000 gallons per acre).

But the Chamber/City, needs to understand that this event is going to be different than previous ones. This is going to be rough, and planning, while you can still buy equipment inexpensively is the course one should be tracking. Deflation is going to be a short term phenomenon. Inflation (hopefully not hyper), will rule the day, as China is going to need to not hold so many treasuries to balance their budget and we continue to cut back.

the community needs to work this out quickly and develop new sources of good paying jobs.

A mill to make flour/bread to satisfy those rich tourists who come here, while at the same time being able to sell to the locals resonably, retaining the money that comes into the community. To do so, rents need to come down to encourage viable commercial enterprises,$30-40/sq foot is silly. My plans are on hold until the rent factor does not kill my business growth.

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ybul 5 years, 2 months ago

i do not have the time to spearhead the idea.

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JusWondering 5 years, 2 months ago

ybul - your ideas don't sound so hair brained. If I were you I definetly would not post them on this forum as some nefarious individual may take them and run with them.

I completely agree that tourism will continue to be part of our culture... hopefully not as big of a part as we learn more and more what our valley has to offer.

Other than logistics if I were considering a manufacturing plant Routt County would be on my short list. There is not a more hearty bunch of individuals and strong work ethic.

Your point on the Chamber... very well spoken. For years it has been the Steamboat Springs Chamber Resort Assn. At some point, drop the resort. The entire focus is so visibly resort and so little Chamber of Commerce.

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JLM 5 years, 2 months ago

@ ybull ---

First, good luck w/ your entrepreneurial cheese endeavor. Though having run some cattle, I would urge you to buy the milk and forget the cows.

I have no dog in your fight about Thailand and the military though two of my classmates were leaders of the recent coup in Thailand. I am very proud of them and they damn sure trump everybody else at the class reunions. I sure never thought that when we were studying calculas they would be applying it to overthrowing their government. Just shows you what a bit of education can achieve, eh?

Let's get rid of pork wherever we find it.

As to being a debtor nation and being an importer they are really insignificant considerations in our global economy. Who cares if we import stone tile from China? If we pay them in dollars they can either buy oil (which trades worldwide in dollars --- what does that say about our currency) or they can buy Treasuries.

The more important issue is who is making the stuff which will determine the economy of the future? Today we are still the big dog in computers and software and that's important. Back scratchers? Not so important!

I would say there is an argument to be made that the importation of oil from the Middle East is not as good a solution as developing and using our own for the sole reason of where the money ultmately ends up. The folks in the oil producing States would also like it a lot better. It is better to be making Americans rich than it is to be making Saudi Princes richer.

In addition, I suspect our global security responsibilities would wane a bit and the funding of worldwide terrorism would be a bit bleaker.

One of the benefits of the recent economic upheaval is the lack of funding for terrorism on a global basis. Russia, Iran and Venezuela are mischievous chaps with a fat wallet of oil revenue at $140/bl --- not so much @ $30, eh?

Was it Marx who said: "No revolution was ever started on a full stomach though many were ended." Odd twist given recent developments? Backwards?

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ybul 5 years, 2 months ago

I would prefer that someone would run with some of them. I am so busy, right now, and I feel it is important that a base is built in order to maintain stability. Heck, I would help, I do not have the time, I would hire more people but I do not want the risk that entails.

The biodiesel, idea, is another's and I am investigating, it with several other ideas. My cattle make me enough and am simply looking for ways to help foster ideas that will build a good foundation, I could throw out thirty ideas, to help revive the local economy.

But, as opposed to funding education, health care and other unlikely forms of stimulus. The stimulus should be small business development grants.

Did not Hockey Legend Gretzky, state the reason for his being great was going to where the puck was going to be, yet, we sit here and are still playing with old ideas. We deserve to be great, not sticking to old ideologies.

JLM, you are like a broken record. Though I agree with the statement about the price of oil and the rise in lack of freedom.

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