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Bad economy affects many around the U.S. – and here, too

By Staff | Mar 2, 2009

You would have to be living under a rock somewhere in order to not know the national economy is in the dumper.

Wall Street is in a panic, and as of the writing of this column, the DOW is down to its lowest in ten years.

The housing market, banking industry, auto makers, all seem to be in trouble and in need of government bailouts.

It seems as though everyone has either been affected by this economic crisis, or has a close family member or friend who has been. Some have seen their retirement money disappear, while others have been laid off, or had their job cut back.

It has affected those with families to support, as well as those who were once thinking of retiring early.

A friend at Best Buy in Minneapolis was given two choices. His department was going to be cut in half. He could either stay and face the odds of being one of the 50 percent let go, or quit now and take a severance package that included up to nine months of pay and health benefits.

He bailed and took the package.

One of the reasons was his lack of faith in both the economy and his company. Best Buy, he says, grew too big too fast, and anticipated continued good economic times.

Right about the time they finished their behemoth of a building on Freeway 494 in the Cities, sales started to go down. And a lot of the sales that were being done were accomplished over the internet.

When times get rough, people usually pull back on purchasing the big ticket ‘luxury’ items, such as new televisions, stereos and appliances.

With his retirement savings dramatically reduced by the stock market, and out of a job, our 50 plus aged friend is evaluating his options.

That is a story being reverberated around the country.

It is a little different here in Faribault County, but not much. Since we are tied so closely to agriculture, our economy is more closely tied to the farming industry, than it is to Wall Street, big business and big banks.

That does not mean we are insulated from all this. Some of our local industries are involved in making layoffs. Many of us have seen college and retirement savings slashed. There are people unemployed here, and looking for work.

The problems on the state and national level are heavily affecting funding for our local cities and schools.

Some of our local businesses are worried about low sales.

On the other hand, our banks are secure, our housing market is stable, and we don’t have rampant unemployment.

On a personal note, newspaper companies are certainly not immune to this downturn in our economy. Anyone reading the news (or worse yet, watching the news on TV) will see stories about newspaper companies filing for bankruptcy – or worse yet, closing down like the Rocky Mountain News.

Newspapers survive on advertising, and when times are bad, businesses in trouble will cut back on expenses, and one that is often cut is advertising.

Some smart companies see a tough economy as a time to keep advertising, and get what sales are out there.

But I digress.

This column on the bad economy would not be complete without a few comments about President Obama’s bailout and economic stimulus plans.

His speech to the congress was inspiring. But like many who watched it, my thought was this: He can talk the talk, but can he walk the walk. In other words, it sounds good, but will all these trillions of dollars (which we don’t have) actually make any difference? Will we be able to save the banks, the housing industry, the car industry, the insurance companies?

Will any of this money actually help us out here in Faribault County? It will a little, as stimulus money comes to our local governments and residents.

It is surprising to hear one day from the president that times are indeed rough, and we are all going to have to help tighten our collective belts for awhile.

Then the very next day we get news releases from both U.S. Congressman Tim Walz and Senator Amy Klobuchar announcing millions of dollars in federal grants for programs in Minnesota.

These are not all stimulus package monies, but many are just regular budget items.

Klobuchar reported $50 million for energy projects, $3.65 million for law enforcement, $7 million for veterans, education and healthcare projects, and $107 million for transportation projects.

These are probably all very worthwhile projects, but I thought a recession was on.

I guess the belt has not been tightened all the way yet.