"The Great Economic Conundrum of 2009!"

It's time to Break It Down!

Perhaps you have heard 2009 was the year of the penultimate recession; the single most devastating economic downturn in this country since The Great Depression (TGD). Before taking this allegory any further, let it be clear, the phenomenon known as TGD was a vast economic upheaval; both severe, and worldwide in scope. Perhaps most important, for comparative purposes, TGD was excruciatingly long, starting with the October 29, 1929 Wall Street Crash, and lasting well into the 1940’s.

Moreover, to further expand upon the contextual significance of the term TGD, the Dow reached its lowest level of the 20th century July 28, 1932, and did not return to pre-1929 levels until November 1954. While there is no mistaking the fact, our contemporary economic malaise is not behind us, few analysts, if any, predict the United States or the world will plummet to the depths of TGD, nor that we will remain at our nadir as long.

Now that we have exercised the opportunity to step, collectively, away from the ledge of hyperbole, there are a few inescapably depressing truths worth noting about our current economic state. The fiercely intractable, negatively spiraling economic conditions of the past eighteen months have changed the way we view the world. An apparently booming economy, bolstered by a seemingly robust housing market conspired to foist a most devastating “trick; no treat,” on American consumers.

Thrust into a sudden free-fall, key elements in the economic universe, made famous, in part because of haughty, “so-called” free market principles, were abruptly redefined as “too big to fail.” This confounding and incongruous turn-about was more than a little confusing. Almost instantly, or so it seemed, America morphed from the most dynamic engine of global capital the world has ever known to a depressed republic, drowning in a sea of red ink, failed businesses, foreclosed homes, abandoned projects, and unemployed workers.

In an effort to forestall tipping over into the economic abyss, Congress collaborated in the fall of 2008, and again early in 2009 (or conspired according to certain opponents) to frame and enact legislation to prevent a collection of luminary institutions from listing into bankruptcy. Thus began a period of unprecedented American governmental largesse. The Treasury department assumed the role of de facto Bank of America; bailing out corporate titans, such as AIG, the original Bank of America, Citibank, and others, and taking a strong stock position in former American Automotive flagship, General Motors.

The misery index spread far and wide. A number of key employment sectors were affected by the consuming disruption, including:

• Banking
• Housing
• Jobs
• Auto Industry

As a result of the effects of instability in the above referenced, a series of related indicators rose sharply, including:

• Evictions
• Foreclosures
• Bankruptcies
• Layoffs
• Abandoned projects
• Unemployment

To be unaware of the deleterious affects of the rampant economic distress caused by the current recession, one would have to be Rip Van Winkle-like; asleep, and or unexposed to any of the variety of media outlets that trumpet details down to the minutia, endlessly and repeatedly, during the 24-7 news cycle. That is of course, unless you are among the fortunate few; a select group of executives whose companies doled out millions in “discretionary bonuses” to top managers.

Executives at companies that awarded such bonuses stand at the apex of “The Great Economic Conundrum of 2009!” In a period when many jobs not already send offshore, are simply being eliminated, the champions of industry at a number of “too big to fail” enterprises are apparently also “too big to fail to get a bonus. The absence of universal sardonicism in the face of this cruel irony is a function of the jaded nature of society. In other words, far too many of us are immersed in and consumed by a surreal déjà vu. How can one muster up yet another bout of righteous indignation, when confronted with the reality of the nth round of mega-bonuses at AIG?

Finally, there is no doubt AIG is the classic poster child for this pattern of behavior, but they are by no means alone. The Triple E (Exceptionally Economically Elite) crowd includes, but is not limited to:

• Bank of America
• United Technologies
• Starbucks
• Hewlett-Packard
• Hologic
• Goldman Sachs
• Morgan Stanley
• JPMorgan Chase
• Wells Fargo
• Citigroup, Inc

That makes a nice round group of ten companies, who apparently are defying the long economic odds that have derailed most Americans. There are many more, but that’s enough to make the point. So the next time you hear a reporter or an economist reciting the scary-gory details of our economy, take a moment to reflect on the resourcefulness of those individuals who have managed to leverage all that economic dislocation and disassociation into a small fortune. Remember: Don’t hate the playa; hate the game.

I’m done; holla back!

Read my blog anytime by clicking the link: http://thesphinxofcharlotte.blogspot.com/. A new post is published each Wednesday. For more detailed information on a variety of aspects relating to this post, consult the links below:

http://www.forbes.com/2009/01/14/global-recession-2009-oped-cx_nr_0115roubini.html

http://en.wikipedia.org/wiki/Great_Depression

http://en.wikipedia.org/wiki/Wall_Street_Crash_of_1929

http://money.cnn.com/2010/03/09/news/companies/bonuses/index.htm?hpt=C2

http://money.cnn.com/2010/02/23/news/economy/wall_street_bonus_increase/index.htm?postversion=2010022312

http://money.cnn.com/2010/02/09/news/companies/bonus_taxes_congress/index.htm/

http://money.cnn.com/2010/02/05/news/companies/blankfein_bonus/index.htm?postversion=2010020518

http://money.cnn.com/2010/02/05/news/companies/dimon_chase_bonus/index.htm?postversion=2010020511

http://money.cnn.com/2010/02/03/news/companies/bank_of_america_compensation/index.htm?postversion=2010020311

http://money.cnn.com/2010/02/02/news/companies/aig_bonuses/index.htm?postversion=2010020309

http://money.cnn.com/2010/01/29/news/companies/aig_sec/index.htm?postversion=2010012914

http://www.washingtonpost.com/wp-dyn/content/article/2009/03/18/AR2009031803188.html

http://www.xconomy.com/seattle/2010/03/05/cell-therapeutics-offers-bigger-cash-bonuses-for-2009-while-stock-languishes/

http://www.msnbc.msn.com/id/34865562/ns/business-economy_at_a_crossroads/

http://recession.org/news/how-rich-are-differentrecession-hits-investment-psyche