— By LARRY M. JONES
Growing up down on the “pore farm,” I developed a somewhat slanted view of economics and the accumulation of wealth.
Since we never had two nickels to rub together, our economic portfolio was a bit thin. We resembled the lyrics of the tune by Alabama, “Song of the South.”
“Well somebody told us that Wall Street fell,
But we were so poor that we couldn’t tell.”
I suppose it was because of hard times created by the “Drought of the Fifties,” I was awestruck by the possibility of being a rich and powerful mogul on Wall Street. This fascination led to writing a book report in school on the life of Bernard Baruch, the “Wizard of Wall Street.” This gentleman was able to foresee the impending market collapse, and was able to liquidate his holdings in time to save his immense fortune. In the meantime, his peers were jumping out of windows to their deaths.
During the Great Depression, and likewise today, things are quite different on Wall Street and Lazy Bend Road. Every day as I watch the local and national news on television and read two daily newspapers, I can seldom equate the spin put on economic indicators to anything I see happening with my bank account.
During the last few years, according to highfalutin’ government bean counters and spinmeisters, inflation has been almost non-existent, and as a result, my cost-of-living increases for my monthly retirement check have been essentially non-existent, as well. How can this be when the cost of almost everything I buy has increased exponentially?
As a gauge for determining cost-of-living increases, the Consumer Price Index has not been reporting any significant inflation in recent years. Supposedly, this is because technology and cheap Chinese imports have kept prices low for consumer goods. The recession has also lowered demand, preventing businesses from raising prices. Instead, they lay off employees to reduce operating costs.
In my simplistic opinion, I think creative accounting and spin has allowed the government to cook the books to fit bureaucratic needs. The use of Core Consumer Price Index, which does not figure in the cost of food and energy, is one way used by the feds to determine whether adjustments to the interest rate is needed.
It’s amazing to me, but down on the “pore farm,” food and fuel are two of the biggest ticket items in our lowly budget.
With all the economic troubles in Europe, I read that Cyprus struck a deal with its European Union overlords bailing them out by reducing deposits by 40% on all individual accounts over 100,000 euros. Life savings of uninsured depositors will be literally wiped out.
Think this can’t happen here in America? I see it already in work. The hard won savings that Helen and I have are being eaten away daily by unreported inflation and essentially zero interest on deposits. These artificially low interest rates are nothing more than an unlegislated tax on saving accounts with seniors taking the brunt.
If this continues, individual savings on deposits will be worth less than half of face value in 10 years. Washington, we have a problem down on Route One Millsap.
Larry M. Jones is a retired Navy commander and aviator who raises cattle and hay in the Brock/Lazy Bend part of Parker County. Comments may be directed to firstname.lastname@example.org.