Not Quite a Sound Economy

It was only three months or so ago when President George  W. Bush reassured us that the fundamentals of the economy were sound.

Since then, the Natural Bureau of Economic Research has determined that the U.S. has been in recession since December 2007. Weekly jobless claims have hit their highest level in 26 years. Washington has committed trillions of dollars in taxpayer funds to bail out an imploding financial industry. The commercial real estate market has begun playing catch-up with the freefall in the residential property market. Panicky investors have driven yields on the short-term Treasury bills to zero. And around the country, more and more Americans are finding themselves in dire straits, as indicated by the following Agence France-Presse report, "Homelessness, Hunger on Rise in US Cities: Report."

Homelessness and hunger increased in an overwhelming majority of 25 US cities in the past year, driven by the foreclosure crisis and rising unemployment, a survey showed Friday.

Out of 25 cities across the United States surveyed by the US Conference of Mayors, 83 percent said homelessness in general had increased over the past year while 16 cities, or nearly two-thirds of those polled, cited a rise in the number of families who had been forced out of their homes.

In Louisville, Kentucky, the number of homeless families increased 58 percent in 2008 to 931 families from 591 people in 2007, with the rise blamed on soaring food, health care, transportation and energy prices.

Boston, Massachusetts and Providence, Rhode Island blamed the rise in family homelessness on evictions by landlords whose rental properties were foreclosed.

Meanwhile, the number of people seeking food assistance for the first time was up in all 21 cities with data on the issue, and was "particularly notable among working families stressed by the increase in food prices and the slowdown in the economy," the report said.

Officials in Philadelphia told the survey that "new people coming to food cupboards are people that are employed with children.

"With food prices increasing as much as 30 percent and incomes either staying the same or decreasing, it is impossible for them to feed their families," the report said.

When asked to identify the three main causes of hunger, 83 percent of cities cited poverty, 74 percent cited unemployment and 57 percent cited the high cost of housing.

And while demand for food assistance was up, providing it was more difficult for cities as the faltering economy and rising joblessness -- two key reasons for the increased demand -- also caused the number of donations to fall.

Greater efficiency in large grocery stores and food suppliers has also shrunk the availability of food assistance because it has decreased food donations from the large organizations, which are the main donors to food banks.

Food banks -- places where donated food is made available free-of-charge to needy people -- are the main providers of food aid in most US cities.

They have struggled in the past year to maintain stock levels due to the increased cost of food and fuel.

"Los Angeles, Boston and Portland reported that increases in the price of food have lead to a decrease in the quantity of food they are able to purchase," the report said.

"In Phoenix, where the cost of fuel and trucking expenses has increased by as much as 72 percent, the total amount of food distributed decreased by 13 percent even though the level of funding increased by 30 percent," it said.

The price of food increased 6.2 percent on average over the last year, the largest increase in nearly 20 years, the report said.

And during the 12-month period ending in September for which most of the cities provided data, gasoline (petrol) prices skyrocketed in the United States to reach record highs of more than four dollars per gallon to the consumer, with the price of diesel fuel used by truckers going even higher.

If this is Mr. Bush's idea of sound fundamentals, I'd love to hear his thoughts on what a bad economy looks like.

Comments

[Conjecture]

IMHO, it is really going to hit the fan! All these hungry people and news leaks out that AIG is paying out additional bonuses while the middle class picks up the tab. All these crooks on Wall Street and in Washington need to wake up. France had a freaking revolution over this same crap and lots of heads landed in the basket.

The US population as a group are a bunch of zombies waiting for their next freebie from Uncle Sam the problem is the freebie is worthless.

This is serious stuff, there is going to be incredible social unrest over all this and lots of people are going to be hunted down and terrible things happen to them.

The cat is out of the bag and you cannot put it back in again. All this fiat paper we call money will be used as either toilet paper are fuel for keeping the house warm during the winter.

Politicians are so scared their already trying in eleven states to get laws passed to tax ammo out of existence knowing what is coming next. We're in it up to our necks folks; buy food, gold/silver if you can afford it and something to protect your family. I'd suggest some prayer as well, we're going to need it believe me.

Conjecture

[Eric]

I wonder how many of these so-called hungry are overweight. Profound obesity is pretty much confined to the so-called poor. Becoming actually poor may be more healthful. I know it isn't politically correct to say it, but seeing fat people whine about hunger should trigger any thinking person's BS meter.

[Omitted Kingdom]

When you eat low down on the food chain, what do you eat? White bread, peanut butter, eggs, junk food, ramen. When the Ramen creator died during the past 1.5 years, the accompanying obituaries mentioned the palm oil etc that ramen noodles are coated in. When you don't have access to fresh food and you eat prepacked anything, you automatically increase your fat content. How many apple orchards have you walked by lately?

What do food stamps entitle you to buy: milk, cheese, bread, cereal--all high fat food. I suppose rice is the best cereal grain to eat. Snack food and fast food should be banned. A friend who worked for second harvest picked up cast-offs from grocery store delis, and as I recall the fat content was high. BTW, there is no such thing as the "so-called" poor. Either you are or you aren't.

[Jeff]

I am not what I would consider poor, but I have definitely been poor. When I was younger, I lost my job during a recession and I had been sinking by money into renovating the home I lived in, and then my daughter was born. I was broke, and I applied for and received food stamps until I was able to finish and sell my house. My point was that back in 1988 I was receiving about $120 for a family of 3. We ate better during that time than through all of my previous adult life. I did not buy any junk food and everything was cooked from scratch.

I don't have any idea if food stamp quantities have kept up with food inflation, but if they have people shouldn't be starving. I think where the problem comes in is when people become homeless. Maybe it has changed, but it used to be that if you did not have an address it was difficult to get food stamps.

[Eric]

There is most certainly such a thing as 'so-called' poor. For instance, I know a woman who uses her food stamp credit card to buy prepared food at Whole Foods, such as cut up fruit in a plastic container that costs $15 for about a pound of strawberries, blackberries, grapes and chunks of melon. I don't buy that for myself because it's absurdly over-priced in my opinion. But then I work for my food money and recognize value, or the lack thereof. The woman I'm referring to, by the way, is about 5'4 and has to weigh at least 200 lbs.

[Fat Man]

Wow, it's the pick on fat people thread. Eric, you're the man. You figured out that only poor people get fat. Tell that to Marvin Davis. He's worth more on his worst day than you ever will be, but he's not a latte sipping metrosexual like you, passing judgement on those you feel superior over. Get a life skinny boy.

[PD]

Please add Buy and Hold to the top 10.

[volliger the cat]

Michael, please fix your post; the story is from 9/2007, not 2008. Bushie did indeed claom a "strong economy" in recent memory, but you should post an appropriately -dated clip to reflect. Thx.

[Michael Panzner]

My bad re: the link. Still, it wasn't hard to find another, similar example. Thanks for the heads-up, "volliger."

[Eric]

I'd rather be poor and thin than fat and rich, but most rich I know are thin and most fat people, in the US at least, are poor. That's just the facts as I see them in the real day to day world. If the self-titled 'Fat Man' chooses to see life thru the filter of delusion or ideology, that's a personal decision.

Health is real wealth. McMansions and flat-screens and cars all get dated or break but keeping fit and eating well is worth our 'weight' in gold as we go thru the various stages of our lives. Obesity is linked to bad health in numerous ways, and poor people don't have to be fat. I'm surmising that they may be using excess food as a drug. Fats and sugars do affect mood.