Hey you. You there in the Glenn Beck T-shirt headed off to the Tea Party Patriot rally.

Stop shouting for a moment, please, I want to explain to you why you’re so very angry.

You should be angry. You’re getting screwed.

I think you know that. But you don’t seem to know that it doesn’t have to be that way. You can stop it. You can stop it easily because the system that’s screwing you over can only keep screwing you over if you keep demanding that it do so.

So stop demanding that. Stop helping the system screw you over.

Look, you can go back to yelling at me in a minute, but just read this first.

1. Get out your pay stub.

Or, if you have direct deposit — you really should get direct deposit, it saves a lot of time and money (I point this out because, honestly, I’m trying to help you here, even though you don’t make that easy Mr. Angry Screamy Guy) — then take out that little paper receipt they give you when your pay gets directly deposited.

2. Notice that your net pay is lower than your gross pay. This is because some of your wages are withheld every pay period.

3. Notice that only some of this money that was withheld went to pay taxes. (I know, I know — yeearrrgh! me hates taxes! — but just try to stick with me for just a second here.)

4. Notice that some of the money that was withheld didn’t go to taxes, but to your health insurance company.

5. Now go get a pay stub from last year around this time, from January of 2009.

6. Notice that the amount of your pay withheld for taxes in your current paycheck is less than the amount that was withheld a year ago.

That’s because of President Barack Obama’s economic stimulus plan, which included more than $200 billion in tax cuts, including the one you’re holding right there in your hand, the tax cut that’s now staring you in the face. Republicans all voted against that tax cut. And then they told you to get angry about the stimulus plan. They didn’t explain, however, why you were supposed to get angry about getting a tax cut. Why would you be? Wouldn’t it make more sense to get angry at the people who voted against that Obama tax cut?

But taxes aren’t the really important thing here. The really important thing starts with the next point.

7. Notice that the amount of your pay withheld to pay for your health insurance is more than it was last year.

8. Notice that the amount of your pay withheld to pay for your health insurance is a lot more than it was last year.

I won’t ask you to dig up old paychecks from 2008 and 2007, but this has been going on for a long time. Every year, the amount of your paycheck withheld to pay for your health insurance goes up. A lot.

9. Notice the one figure there on your two pay stubs that hasn’t changed: Your wage. The raise you didn’t get this year went to pay for that big increase in the cost of your health insurance.

10. Here’s where I need you to start doing a better job of putting two and two together. If you didn’t get a raise last year because the cost of your health insurance went up by a lot, and the cost of your health insurance is going to go up by a lot again this year, what do you think that means for any chance you might have of getting a raise this year?

11. Did you figure it out? That’s right. The increasing cost of health insurance means you won’t get a raise this year. Or next year. Or the year after that. The increasing cost of health insurance means you will never get a raise again.

That’s what I meant when I said you really should be angry. That’s what I meant when I said you’re getting screwed.

OK, we’re almost done. Just a few more points, I promise.

12. The only hope you have of ever seeing another pay raise is if Congress passes health care reform. Without health care reform, the increasing cost of your health insurance will swallow this year’s raise. And next year’s raise. And pretty soon it won’t stop with just your raise. Without health care reform, the increasing cost of your health insurance will start making your pay go down.

13. I wish I could tell you that this was just a worst-case scenario, that this was only something that might, maybe happen, but that wouldn’t be true. Without health care reform, this is what will happen. We know this because this is what is happening now. It has been happening for the past 10 years. In 2008, employers spent on average 25 percent more per employee than they did in 2001, but wages on average did not increase during those years. The price of milk went up. The price of gas went up. But wages did not. All of the money that would have gone to higher wages went to pay the higher and higher and higher cost of health insurance. And unless Congress passes health care reform, that will not change.

Well, it will change in the sense that it will keep getting worse, but it won’t get better. Unless the problem gets fixed, the problem won’t be fixed. That’s kind of what “problem” and “fixed” mean.

14. Sadly for any chance you have of ever seeing a raise again, it looks like Congress may not pass health care reform. It looks like they won’t do that because they’re scared of angry voters who are demanding that they oppose health care reform, angry voters who demand that Congress not do anything that would keep the cost of health insurance from going up and up and up. Angry voters like you.

15. Do you see the point here? You are angrily, loudly demanding that Congress make sure that you never, ever get another pay raise as long as you live. Because of you and because of your angry demands, you and your family and your kids are going to have to get by with less this year than last year. And next year you’re going to have to get by with even less. And if you keep angrily demanding that no one must ever fix this problem, then you’re going to have to figure out how to get by on less and less every year for the rest of your life.

16. So please, for your own sake, for your family’s sake and the sake of your children, stop. Stop demanding that problems not get fixed. Stop demanding that you keep getting screwed. Stay angry — you should be angry — but start directing that anger toward the system that’s screwing you over and taking money out of your pocket. Start directing that anger toward fixing problems instead of toward making sure they never get fixed. Instead of demanding that Congress oppose health care reform so that you never, ever, get another pay raise, start demanding that they pass health care reform, as soon as possible. Because until they do, you’re just going to keep on getting screwed.

And it’s going to be that much worse knowing that you brought this on yourself — that you demanded it.

Thanks for your time.

P.S. — I didn’t mention this because I’m trying here to be as patient with you as I can, but you might also want to keep in mind that in addition to screwing over yourself and screwing over your family and screwing over your own children by demanding that Congress oppose health care reform so that you will never, ever see another pay raise, by doing that you’re also demanding that I never, ever see another pay raise, which means that you’re also screwing over me, and my family, and my children. Not to mention the millions of poor and uninsured and uninsureable people I didn’t even mention above because they don’t seem to matter at all to you. And for that, let me just say the only appropriate thing that can be said to someone so determined to do direct, tangible harm to the welfare of my family: Fuck you, you fucking moron.

based on increased production and reduced debt ratios.

Ford is the auto manufacturer leading the charge out of the recession.

Yesterday, General Motors announced that it would be bringing 1,350 laid off employees back to work, 1,050 of them located at the Lordstown Assembly plant in Lordstown, Ohio.

Lordstown Assembly produces the Chevy Cobalt and HHR and will soon start production on the Chevy Cruze. The Chevy Cruze is a slight step up in size from the Cobalt, but reportedly can achieve 40mpg highway with a conventional engine. Initial reviews of the Cruze in foreign markets where the car is already being sold have been positive.

While I hate the way the Cash for Clunkers program works, at least it’s doing some good by bringing these people back to work.

This one jumped out at me:  The Wall Street Journal reports U.S. Consumers Reduce Debt for Fifth Month in a Row

That headline taken in a vacuum should be good news right? Well… sorta. It was consumer debt that both drove the economy for the last 30 years and yet at the same time contributed to it’s implosion.

People drastically reducing spending and (hopefully) living within their means don’t help an economy that depends on consumer spending for 70% of it’s activity.  These people (including myself) are putting as much of their resources into reducing their debt and freeing themselves from the usurious practices of the banks.  But this is a case where we have too much of a good thing. If debt reduction happens too fast, the corresponding consumer spending reduction could extend this recession far longer than normal.

About the only good thing I can see coming from this either way is that if enough people relieve themselves of credit card debt, it will hurt the banks since they will no longer be able to make money from their usury. They might actually have to compete a little and put their interest rates at a reasonable level.

Anything that hurts the banks makes me smile a little inside. It’s not like they don’t deserve it.

If the current recession has hit Germany, it doesn’t show. Walking around Cologne there is construction everywhere. New shops going up everywhere. The stores are busy and bustling. Germany has been careful to not outsource it’s labor force to foreign markets as much as we have in the US. If German companies need cheap labor, they set up shop in the former East German territories. This way, at least the GDP stays local to Germany’s economy.

Why can’t we do the same thing here? Sure, we couldn’t pay the minimal wages we pay Chinese prison laborers to sew soccer balls with their teeth, but I’m sure there are willing laborers in states like West Virginia, Alabama, Arkansas, etc. The cost to ship thing from Alabama factories to stores in the US would have to be a LOT cheaper than shipping it from Shanghai. At the same time, we would have an easier time making sure those workers are treated ethically and there are better safety standards in the products they produce. Just ask any Mattel executive about lead in toys and see what kind of reaction you get.

Yes some prices will go up. Do you really think $30 for a DVD player is reasonable? It’s time that we start demanding some real quality in the products we purchase.

Folks, that’s 14.5k more than Toyota sold in July.

I’ve been rather pessimistic on the economy for a while now. As recently as April I was predicting a long drawn out recovery. I also predicted that a second wave of foreclosures coming from a type of mortgage called Option ARMs would start carpet bombing the economy all over again. Well, unlike a certain ex-President of ours, I’m willing to chart a new course when provided with new information.

Here is why I am cautiously optimistic for a near term recovery. I’ll go out on a limb and say that the bottom was sometime in June 2009.

Option ARMs

First, my biggest reason for originally predicting a long, drawn out, recovery was the Option ARMs. In a previous blog post, I explained how Option ARMs are one of the most dangerous mortgage types out there. The cliff notes version of this is: You can pay less than the amortised amount each month and whatever you don’t pay gets tacked onto the principle, up to 125% of loan value, and thus charged interest. After about 5 years or once the principle reaches 125% of loan value, the monthly payment “recasts” and now the owner has to pay the entire amortized payment on 125% of the loan value and now they only have 25 years amortization… just as sugar on top. A large batch of these mortgages were due to start recasting at the end of 2009.

My reason for course change? Many of these mortgages aren’t even making it that far. 42% of Option ARMs originated in 2006 and 35% of Option ARMs originated in 2007 are more than 60 days late today. These mortgages are never going to make it to the 5 year mark for recasting. Now, I’m not saying that these people aren’t going to be foreclosed on, they are. It’s unlikely that ANY of these mortgages will qualify for loan modification since one of the requirements is a principle balance lower than the value of the home.

Here is the good part, by going into foreclosure sooner, it softens the overall impact on the economy. So while it’s still bad, it hurts less. Would you rather be hit by 18 inches of snow over a period of 3 days or get hit by an 18 inch diameter snowball?

Ford posts profit

Ford Motor Company had two pieces of good news. First, Ford posted an overall profit for 2^nd quarter 2009. Their operating cash still took a $1 billion hit, but clearly progress is being made. The proof of that is in the next item.

Ford posts positive sales numbers

Ford posted their first sales gain in 19 months. Now I’m sure that a good portion of this can be attributed to the government’s Cash for Clunkers program, however Ford’s current model lineup easily stands on it’s own without help from the government. If their new Taurus had been in showrooms already, I’m sure they would have done even better.

This comes on the heals of Toyota’s statement that they are no longer profitable in North America.

Anecdotal

I do I.T. consulting work on the side. One of my clients is a real estate appraiser. Just three months ago he was talking about closing up shop. Now he’s having me refurbish older computers that haven’t been used in a while so he can bring in more help for all the work he has.

A guy who does painting and drywall work for me was talking about how he is closing on a house on Thursday but he doesn’t have time to work on it because of all the work he has coming in suddenly.

GDP only at -1%

This is where the caution part of “cautiously optimistic” comes in. That number, in a vacuum, doesn’t look too good. Taken with the numbers of the previous quarters it signals a huge turnaround. However, much of that regrowth has come from the government’s stimulus projects. Sure the bill was passed in the late winter, but it took till April and May before any sizeable amount of money was dispersed. In my area alone there are no less than four major bridge building/refurb projects that have started or resumed.

Unemployment

The unemployment numbers still don’t look too great but they tend to be a lagging indicator simply because they aren’t reported till after someone gets or loses a job. Watch the unemployment stats over the next few months.

Green Shoots?

Not really. But the seeds have been planted and watered.

Watch this space.