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Dr. Boyce Watkins
Hey peeps!
I am going to be on the Jesse Jackson Show Sunday morning at 8 am to discuss the Obama stimulus package. The show is syndicated and you can click here to see a list of affiliate cities. I'll be joined by my good friends and respected colleagues, Dr. Marc Lamont Hill (Columbia University) and Dr. Julianne Malveaux (President of Bennett College for Women). I have a lot of thoughts on this measure, and I plan to write about it a great deal in the coming month.
I also want to give a shout out to our friends and family in the Kentucky storm. Their power has been out for several days now and I wish you all the very best as you confront this ordeal. We have a lot of YBW family members in Kentucky, so my thoughts and prayers are with you.
I should also quickly note that Juan Williams from Fox News, the man I labeled as "Bill O'Reilly's Happly Little Negro", has struck once again. Making reference to the first lady, Michelle Obama, Juan referred to her as "Stokely Carmichael in a designer dress."
Most of you know how I feel about Juan, so there isn't much else to say. I will only end this by saying that as long as there is money to be made, people will always be willing to embarrass themselves on TV. The same way that Juan refers to Michelle as "Stokely Carmichael in a designer dress", I would refer to Juan as the "Flavor Flav who went to college". Your integrity should be of greater value than your paycheck. Juan should be ashamed of himself.
I write on the state of the economy below. Please enjoy!
Boyce
To join the Dr. Boyce Money Advice List, please click here.
Could the Economic Downturn possibly be a GOOD thing?
By Dr. Boyce Watkins
I hate being the doctor who has to tell the patient he has cancer, but the truth usually sets you free (or so my mother told me): We are in the midst of an economic bloodbath. It’s tough to argue that an economy which shrinks by an annualized rate of 5% is still healthy. It’s hard to tell someone that 7.2% unemployment, with the most job losses since 1945, is a good thing. A 4,000 point drop in the Dow is nothing to sneeze at, even if you have plenty of tissue. Times are tough, we know that.
But if we focus hard enough, we might be able to find a few bright sides to all this. With hopes that no one chooses to kill the messenger, I am going to give it a shot.
1) It could always be much worse.
The United States has, according to some, the strongest economy in the world. Our economy could shrink like Rush Limbaugh’s body on drugs and still be disgustingly rich compared to the rest of the world. Don’t believe me? Consider the “fast-growing” Chinese economy, the one that everyone thinks is going to outpace the United States in the next few years. Our annual tax revenues are nearly 4 times greater than China’s ($2.5 Trillion vs. $670 Billion) and they have over 4 times more people than we do (300 million vs. 1.3 Billion). In other words, our per capita tax receipts are over 16 times greater than China’s. So, we’re far better off than most of the world, even when we’re broke.
2) If there were ever an argument for getting out of Iraq, this might be it.
It’s hard to declare war on random countries if you don’t have the money to do it. War is big business and attacking other countries is a huge financial investment. If you don’t think war is about money, then you may want to take a couple of Political Science and History classes. Perhaps these troubles at home will keep us from creating trouble abroad, since Americans have lost patience with irresponsible, arrogant war-mongering. The Obama stimulus plan is asking for over $800 Billion dollars to boost our economy. We’ve already spent nearly $600 Billion in Iraq. Rather than declaring War on Terror, President Obama has declared War on the Recession, which seems to be a far better investment.
3) If you want to buy cheap stocks or real estate, this is the time to do it.
When the market rises, everyone wants to buy stocks. People forget that you shouldn’t buy stocks when prices are high, you buy when the prices are low. Companies with plenty of cash are grabbing investment and real estate bargains that were hardly available a year ago. You should be doing the same if you can afford to do it. Investors who purchase stocks after major market declines tend to do much better than those who buy during booms. You hear me Warren Buffet?
4) Struggle makes us FOCUSED.
Although I tend to be a hardcore capitalist, a part of me misses the activism of the 1960s, when people cared about more than making a dollar. OK, I wasn’t around in the 1960s, but I’ve watched enough old movies. Going through tough times not only teaches one to pursue a higher purpose in life, it also leads individuals to more carefully scrutinize the state of affairs in our government. In fact, I dare to argue that the financial crisis was just what Barack Obama needed to secure his election over John McCain. Economic prosperity allows us the luxury of choosing our politicians based on silly issues, like gay marriage (as we did in 2004). When we are worried about putting food on the table, we look beyond the silliness and choose the most qualified and most intelligent person for the job (after ensuring that he knows Africa really is a continent). Finally, tough economic times make you more responsible in your own money management, as the threat of financial insecurity keeps us all on high alert.
Those are my points, so again, please don’t kill the messenger. I certainly do not celebrate a weak economy, but I am a firm believer that focusing too much on the door that shuts keeps us from appreciating the ones that just opened. There’s always light at the end of the tunnel, a pot of gold at the end of every rainbow, and….well, you get the point. It’s the toughness of tough times that make the good times good. Keep hanging in there, it’ll be ok.
Dr. Boyce Watkins is a Finance Professor at Syracuse University. For more information, please visit www.BoyceWatkins.com. To join the Dr. Boyce Money Advice List, please click here.
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