Wednesday, October 22, 2008

Florida's Floundering Economy

I really wish I could think of something positive to write about today. But news is rarely positive, and I think some of this needs to be discussed. The economy isn't merely bad in Florida, it's bad everywhere. Even our brethren in the U.K. are suffering, according to recent news articles (perhaps our friend Daniel would like to weigh in on that).

Florida is particularly hard hit because we are such a tourist-y economy. People don't have extra spending money, and gas prices have been sky-high (until recently) and so they're not travelling as much, they're not dining out, they're not throwing money at luxuries or baubles.

But Florida has built its economy on that type of a consumer, and it's now suffering as a result of it. If you open up our local newspaper, the jobs section is only a couple of inches long, and the jobs offered are so industry-specific that the typical ad comes close to reading like this:

"Wanted: Salesperson for medical manufacturer. Must have 2 years of experience as a rep for company that manufactures insulin needles. Must have 1 year of experience as a former cancer patient. Must have one brown eye, one blue eye, and have a first name that begins with A, P, or T. Although all resumes are appreciated, only qualified applicants will be called back."The newspaper itself was full of dire predictions yesterday, and pointed out that all the service jobs are at risk, which comprises 25% of our total workforce.

Of course it's often argued that telling such truths creates a self-perpetuating problem. However, it's equally important that we understand what we're up against.

Frankly, I'm worried.


The Lazy Iguana said...

Good thing so many people want to continue the same basic economic policies! Maybe this time cuts at the top will actually create jobs.

M@ said...

It's common knowledge that credit card issuers will settle delinquent debts for 55 cents on the dollar. But did you know that Bank of America is now settling for 25 cents?

Saur said...

Lazy, Either candidate will be about the same. One is less socialistic than the other - that's all. Call me a cynic, but look back at this in two years and you'll rethink it.

M@, You're kidding! Bet they won't get even that!

The Doozie said...

Matt is totally right, If you stop paying your credit cards, they will settle for way less. They deserve it though because of all their underhanded ways of taking advantage of people that are not smart

Ed Abbey said...

Right now, everyday I wake up with a job that pays is a blessing.

daveawayfromhome said...

It doesnt matter how much on the dollar they'll take if you havent got it (I went through all this a decade ago). If you could send them, say, $1000 to cover your $4000 debt, wouldnt you just make the monthly payment of $137.58 or whatever. (I'd also ask how much of that debt consists of $39 late fees and such - if half your debt is basically made up, how generous is it really to discount the debt by half?)

We've spent years building an economy (i.e., borrowing) based on what we plan to expand to rather than on what we've already got. Now that the economy has stopped growing, the dominoes are falling all that much faster and harder.

Credit should be reserved for big, long-term investments. As a nation, we've built up a huge debt on what is mostly a series of lunch buffets. Time to get used to peanut butter.

The Lazy Iguana said...

25 cents on the dollar??!?!?!?! You mean I can go out and buy a $100,000 boat on a credit card, default on it, then settle for $25k and keep the boat?!?!


My Iguana Sense is tingling. Wheels are turning. Schemes are scheming.

Fred said...

What burns my butt is that my house has lost so much value, yet my taxes will actually go up this year.

Saur♥Kraut said...

Fred, Oh so true and so very scary. Everyone in our neighborhood is talking about that right now. And a couple houses have been outright abandoned, waiting on foreclosure and rotting away.

Lazy, ;o) Bad, bad, bad.

Dave, So very true. I was in such financial circumstances many years ago. And, of course, any of us may be once again for all we know.

Ed, Very true, and you're right - it's something to be grateful for.

But you know, in Florida businesses will take advantage of that. It's a Right to Fire state (they give it the false name of Right to Work). That means that with a more desperate workforce, they will be able to become almost dictatorial in their demands and the State won't stop them.

In fact, many will begin illegal practices once more (discrimination, demanding unpaid overtime from employees) because they CAN and if you want the job, you'll keep your mouth shut.

Doozie, You know, most credit card companies charge usurious amounts but the government has specifically exempted them from loan sharking laws.

Lucy Stern said...

I have to say that my husband and I have worked hard to stay out of debt. The economy is in a lot of trouble and there is no easy answer to any of this. We will all have to hunker down and do our best with what we have.....Yes, it's scary out there.

Saur♥Kraut said...

Lucy, How wonderful to hear from you!!!

Yes, I've tried to stay as debt free as possible, though I do have a mortgage. But even with just ordinary bills, it adds up quickly. :P

Uncle Joe said...

my family suffered a recession 4 years ago when I got sick and couldn't work anymore.
we've already adjusted.

we're still living within our means and WILL get to take a vacation next year.
maybe we could come to Florida!

Saur♥Kraut said...

Uncle Joe, There would be a place for you here, and maybe that would help with the decision making!

Daniel Hoffmann-Gill said...

Well hello...

I was thinking before you even mmentioned me and I sawe your post title on my blog list that I wanted to erase the word Florida and replece with World.

In the UK we have a problem with banks lending money and with high gas and electricity prices but they are on their way down and interest rates will be cute again to about 4%

But, if I'm honest, if you're fiscally sensible like me and Eva-Jane are you can ride it out.

We have large savings, a small mortgage and working hard to keep bringing the cash in.

Saur♥Kraut said...

Daniel, That's excellent news, indeed. I'm glad you guys are OK, and very interested in how your interest rates are dropping again. Is that due to any government intervention?

In our case, when the government intervened during the Great Depression, it actually made the USA's depression last years after Europe's. Many people speculate that the gov't's intervention here could do the same thing.

Daniel Hoffmann-Gill said...

Our interest rates are set by a genuinely independent panel with no government control or intervention and they have steered a good course to control inflation but matters no mean that cuts are needed.

2% has been mooted as a low marker next year but I don't quite buy that.

Saur♥Kraut said...

Daniel, It sounds as if that part of your system is superior to ours.