The Conundrum Called the Economy: Is Anyone Ever in Control?
By Jim Penn
Many of our presidents have taken credit for “good economy news,” regardless of whether their actions merited their blusterings. Former President Clinton and current President Bush are two excellent examples of this political bluster and boastful attitude.
I was thinking about this phenomenon when I ran into two of my favorite people, Professor Ferdinand Von Rumproast and Harold CPA, Superhero, in the State Street Bar and Grill. I often hit the joint for a beer and a burger and some of their killer fries.
There they were, the Professor with his dirty martini and Harold, without his cape (thank goodness) sipping on his standard root beer with a twist of lime.
Wading in to engage their fertile minds, I asked, “Well, what sayeth thou about Federal Reserve Board Chairman Bernanke and his Board raising the federal rate another quarter-point?”
“What’s with the Shakespeare crap?” responded the Professor. “Bernanke had no choice; signs of inflationary pressures are clearly showing. He’s got to keep economic growth in check. Inflation can kill a healthy economy.”
Harold, the CPA renowned for jumping complex bank reconciliations in a single bound, nodded his head, apparently in approval, but added, “I guess so, Professor, but I don’t know how healthy our economy is. Corporate malfeasance and misfeasance haven’t been slowed one iota by the Sarbanes-Oxley legislation – you know, they nicknamed it Sox. You remember, the law enacted to curb the obvious abuses caused by overzealous and dishonest executives, accountants and lawyers in the Enron, Global Crossing, Tyco and other past “anything goes” wheeling and dealing corporate high-flyers. Media continues to report corporations and investment bankers paying large fines and business perps being indicted. Sox hasn’t appreciably reduced these shenanigans. And, the consuming public, you and me, ultimately pay for their wrongdoings.”
I couldn’t resist. “What about these high oil prices, trade and budget deficits, major problems in our once highly-valued automotive and high-tech industries? Even if outsourcing is good for us and the world in the long-run, our business clock is being cleaned by India’s and China’s research, creativity, innovation and excellent academic institutions. We’re losing the edge we held for years. Our farmers are hurting, and medical care costs are going out of sight while medical care, pharmaceutical and related companies continue to record large profits. Again, the consumers are paying for these events and circumstances. The legislators and governmental and corporate leaders responsible for these results aren’t touched since their health care and futures are funded by our tax-paying dollars.”
Harold couldn’t contain himself. Standing and assuming his superhero stance – with hands on hips, his diminutive chest expanded – he said, “What about the national debt - nine trillion, three trillion of which was added by President Bush in five-plus years?
“Now, we’re beholding to China, of all countries, and Japan in their purchases of our treasury securities needed to finance our country. Where’s it all going? The stock market continues to rise on the strength of consumer confidence, although these same consumers are overextended in credit card debt. What about rising housing costs and flat wages and earning capacity for the majority of us? As a responsible accountant, I’m sick about this. I need to go and write down some inventories.” With that last statement, he stormed out of the bar with hardened resolve.
The professor took a sip. “That little guy gets quite riled up, doesn’t he? You fellas have made some good points, but Bernanke can only do what he can do. It’s up to Congress, the administration and the business community to put us on a realistic economic growth path. Say, that burger looks good. Think I’ll order one.”
“Do hamburgers go with martinis, Professor?”
“Everything goes with martinis. Besides, I’ve gotta support the beef farmers and grain growers, don’t I?” He winked at me.
And, another afternoon of frustration-letting passed in the old State Street Bar and Grill. I hope that Harold found inventory to write down. For all you non-accounting types, that means a reduction of company profit or an increase in losses. You know, that little guy just might have a mean streak.