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The Good, The Bad, and the Microeconomic

The Good, The Bad, and the Microeconomic

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Speaking of economic indicators...

Speaking of economic indicators... Source: Jeff Haynes/Getty Images hide caption

toggle caption Source: Jeff Haynes/Getty Images

Listen — I'm not going to pretend that it's not completely crappy out there. Gas prices, food prices, bank runs — it feels like the economic Ragnarok. In the interests of soothing some of your anxiety though, we decided to take a moment to put it in perspective. The financial system is wounded — but it's not broken. We'll get through this, and it's possible we'll end up with a much healthier economy in the long run. In the meantime, what are the economic indicators you should pay attention to as we wait for this slow-drip bad news to stop? Tell us what you're looking at — and we'll give you a little advice.



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An indicator of the economy that I've noticed is the number of teenagers hired to stand on sidewalks holding signs up for pizza specials, Pay Day loans and even a local accountant. I've only seen this when times are economically depressed.

Sent by Gary | 2:18 PM | 7-24-2008

I had heard, and I never sought to confirm this but is the sale of peanut butter considered to be an indicator for the economy? When the economy goes bad, peanut butter goes up because the price of other sources of protein, like steaks, become less affordable.

Sent by Dean | 2:22 PM | 7-24-2008

My economic indicator is food. I have found myself in arguments over the years with economists who insisted that there was no inflation. I'd argue: I'm seeing milk and other staples increase in cost; food manufacturers are shaving ounces off food packages, and I'm told that there's no inflation because the cost of a wide screen TV (which I may never purchase) is declining.

Sent by Laurel S. | 2:25 PM | 7-24-2008

It is my understanding that the unemployment rolls are shorter by years than they use to be and once a person runs out of unemployment they officially disappear. This would make the unemployment records of today give a very misleading indication of how many people are actually unemployed. Is this true.

Sent by David Simmerer | 2:29 PM | 7-24-2008

"When you see that you are running out of supermarket plastic bags, is just because you just lost your job", That was my economic indicator.

Sent by Vanessa Dazza | 2:29 PM | 7-24-2008

While the fear is widespread, it's not a psychological recession, it's a very real one for many 'ordinary' people. I am the executive director of a job search skills training and placement agency. We are overwhelmed with people who are scared for very good reason -- they've lost their jobs and finding another is proving quite difficult. In the meantime they are dealing with very real bills such as housing, auto, maxed out credit cards, and healthcare expenses, all of which are staring them in the face with real due dates, not perceived ones. The guest, like most politicians, pundits and reporters these days, wants to say it's an isolated problem or issue of financial hardship. Those of us working in the trenches know that it's widespread and the fear is based in genuine concerns.


Sent by Judith Tilton | 2:30 PM | 7-24-2008

Can we trust the experts or the government? If government calculations of inflation do not include food or energy, they to not reflect our lived experience. The reality described by economic indicators is an expression of a paradigm that serves the interests of the rich and powerful. In times of economic disruption that paradigm may not serve the interests of working people or describe their experience.

Sent by Bill Hall | 2:30 PM | 7-24-2008

If, as Mr Samuelson alleges in his article, Depression" is a term of art. It has no precise definition." how can anyone say fro another that they are not experienceing a "Great Depression"?From the seat of a weel-paid economist it may seem the econmy is not broken, but from the viewpoint of one who has lost their business, health insurance, savings, and is in danger of losing their home, it sure feels like a "Great Depression" here on the ground!

Sent by Sammi | 2:36 PM | 7-24-2008

Although the signs are bad for the economy right now, we should be equally concerned about the ecological health of our planet which sustains us.

The changing times are bringing more of an awareness of how our consumer culture erodes our psyches. We need to pay attention to the messages the earth is sending.

Sent by yael | 2:37 PM | 7-24-2008

I am really fed up with "experts" coming on the radio and saying how bad public education is, and how throwing money at it will not help. Excuse me - our children are more and are better educated than ever before! And, who, pray tell, has been throwing money at education? Every district in our state has been making deep cuts in program, transportation, staff and so on. Let's get it straight, OK?

Sent by Danny Leaverton | 2:37 PM | 7-24-2008

One guest pointed out that past cycles of innovation where brought on by Government sponsored research but that the Bush administration missed out on the coming energy innovation cycle. This is no suprise when, for example, Senator McCain says that he would only spend $2B a year on energy research. Note that this is about what five of the 28 (!!) helicopters the government is buying for the exclusive use of the President!

Sent by Leo | 2:38 PM | 7-24-2008

I knew that the economy was changing for the worse is when the senior citizens in my neighborhood began pulling their old bikes out of the garage and riding them to do local errands. My husband and I began following their example and have noticed an increase in other adults doing the same. We ride to the grocery store, hardware store,library everywhere we can.

Sent by Debbi in Cincinnati | 2:41 PM | 7-24-2008

I heard one of the guests say that a solution to our economic problems will need to be "easy" and "un-intrusive into our lives". I keep hearing these sentiments over and over from those whose careers and lives are tied up in the current and failing system (economists, business persons, and politicians). When has learnig, addaptation, and true growth ever been easy or un-intrusive?

Sent by Cory Stanchfield | 2:44 PM | 7-24-2008

I am a musician who lives in Las Vegas. I split my talents between performing and teaching private lessons. Teaching accounts for about 3/4 of my monthly income and so is the best indicator in our household of the economy.

Although entertainment is something people use to escape economic troubles (going to shows, attending concerts, etc.) it's the private lessons for their children that are considered "luxuries." It's easy to tell when the economic times are tough because lesson enrollment goes down or I see more kids cycling through my studio. People will enroll their kids for lessons, stick around for a couple months before withdrawing them. I've seen a steadier flow of "new" students this past year than I ever have.

When times are hard, luxuries like music lessons may be the first to be cut from family budgets. Unfortunately my income is directly related to how many lessons I teach which means my paychecks also suffer.

Sent by Lisa Jenkins | 2:49 PM | 7-24-2008

Having gotten my engineering degree 30+ years ago, I have already advised both my children to stay far away from the field: finance offers larger likely rewards for much less work in college.

Sent by Ed | 2:54 PM | 7-24-2008

I believe a combination of factors are casing the economic problem. There are tens of thousands of the middle class professional falling off the spending list. These middle class professionals have been the driving force of the larger economy for several decades! I believe the second issue has been the biggest problem. Most American have been spending their future. They have borrowed enormous amounts of the money they have not even earned yet. I call it spending your future. Well, their future has caught up with them. I have witnessed so many homes with as much as 200% of their worth borrowed out. This faults economic force has driven inflation that now needs to catch up.

Sent by Jerry | 3:34 PM | 7-24-2008

Let's say about 10 trillion dollars in debt, maybe a 3.65% rate... roughly a BILLION dollars a day in debt repayment. Please explain to me how this can turn out OK. My guess is that if I were to secure a sub-prime loan for 10 trillion, they would make me pay it back. What are the ways it could play out?
(Even Washington would end up doing enormous good with an extra BILLION a day to spend.)

Sent by Mark Flynn | 4:30 PM | 7-24-2008

My economic indicator: how many people are needing food at the Food Bank which serves our town of 8,000. Normally they make 4 boxes a day. This past Weds. it was 15. People simply could not feed their families the last week of the month.

Sent by J.Ringer, Idaho | 11:42 AM | 7-25-2008

As others have said the "core" inflation which is usually given by government sources includes items that we may buy once every few years, if at all, and excludes food and fuel. The real rate of inflation, rarely mentioned, includes food, fuel and all those necessities we must purchase every day, week or month. These prices are doubling while the "core" items may go down a little. No comparison.

As for unemployment, I don't trust those government figures, either. Do they take into consideration the tons of "consultants" and "independent contractors" whose get few if any assignments at a time like this. Years ago we had very few people in this category. Most people worked for big companies or small neighborhood or family businesses. There's a lot of explaining to do and a lot of education needed to understand these figures.

Sent by wordgrl | 3:57 PM | 7-25-2008

Not to turn a knife for another knotch, but imagine the money we lose in the sand every day over seas. Could that money be better spent? Cure the hunger, cure the violence

Sent by Joseph | 4:22 PM | 7-25-2008

Mine: How many people are on the bus?

Sent by someone | 3:19 PM | 7-26-2008

I also believe we will "get through this" but not without some pain and much growth.

First, our country needs to shift from dependence on foreign fuel to spending for renewable fuels, i.e., wind (perfect for the midwest), solar (everywhere but especially the south), biomass fuels (not corn but the biowaste everyone has but throws away), and geothermal. Wave and coastal power can be used on both East and West coasts.

Next, we need a mental shift from a "consumer" society to a "saver" society where everyone saves not only money for retirement and big ticket items, but recycles and composts to reduce the size of our landfills. Credit buying is not sustainable. It is an easy fix in the short term but devastating in the long term.

Finally, a focus on education to invest in and repoint it for this century. Students need to prepare for life vocationally as well as educationally but vocational training has to be real-world and focused on preparing young people for jobs in the economy now. Training in sustainable energy fields, computers, and all of the skilled fields (carpentry, welding, plumbing, etc.) as well as the service sector will more prepare our children for life in the current job climate.

Sent by Dina Mayne | 10:10 AM | 7-28-2008

In 1978 David Lee Roth sang:
"look at all these little kids
Taking care of the music biz"

I use the Pop Charts as an economic indicator. I was too young in 1978 to purchase Van Halen's first LP but I did pick it up in the mid 90s on CD. At that time boy bands, Brittney Spears and her many imitators were dominating the airwaves. And I noticed a correlation.

I'm not an expert in these matters but it seems to me that when the economy is good, people have more money to go out to eat and shop at the mall. Which creates jobs for teenagers. Also if people are making a little more money than they had been, they can give their children an allowance or splurge and buy them that CD they are 'just dying' to have.

When kids have money of their own they spend it on the things that are important to them. One of those things is music.

In times when money is tight, there seems to be more adult acts on the charts.

So with Miley Cyrus and the Jonas Brothers having songs on iTunes top ten downloads I think the economy is not so bad off!

As to the people who are more pessimistic and say we are in hard times and it is only going to get worse. I have noticed in my short 30 years on this planet that someone, somewhere is CONVINCED that we are in the midst of a terrible recession and it will only get worse. I think looking in your own wallet is a terrible indicator of the nation's economy. There are too many factors beyond the economy that may affect your personal income.

There will always be someone who just lost their job. Prices will always be higher than they were 20 years ago. People are quick to point out that gas was only $.20/gal. in 1950 but no one seems to remember that minimum wage was $.75/hour. I wonder if the people who long for 1950s prices would be willing to work for a 1950s wage?

Sent by Joshua Glassburn | 10:27 AM | 7-28-2008