Saturday, November 18th, 2017

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Recession? Not Yet!, Obama Taking Republicans Money, Should You Tip During Tough Times?

We’re Not in a Recession?

Believe it or not, we are not officially in a recession. A recession is defined by two consecutive quarters of a negative gross domestic product (GDP). The Commerce Department recently reported that the GDP fell .3% during the third quarter (July – September). Consumer spending makes up 2/3 of the economy. And consumer spending has dropped the largest amount in 28 years. Experts and analysts predict that next quarter we will have an even bigger drop.

Ask most people and they will tell you that we are in a recession. But, no matter how much we are cutting back and tightening our belts, we are not in a recession until the National Bureau of Economic Research says that we are in a recession. And they have given no indication of when they are going to do that.

Unemployment numbers remain high: New claims totaled 479,000, the same as the previous week. The Fed cut the federal funds rate (the interest rate banks charge each other on overnight loans) by half a percentage point. And the government has begun distributing funds from the financial rescue package.

But no, we’re not in a recession. Not yet, anyway.

More Business Leaders Backing Obama

Many businesses that previously backed Republicans are switching to back Obama.

Obama has raised more money than McCain among employees and executives in these industries: finance, insurance and real estate; health; communications; law; and "miscellaneous business." (Miscellaneous business includes retail, service industries, and other small businesses.)
McCain has kept the traditional Republican lead in transportation, construction, defense, energy and agribusiness.

According to USA Today, “Obama has taken in $20.5 million from that sector to McCain’s $13.4 million, records show. Those numbers don’t include September and October, when Obama was raising tens of millions but McCain’s campaign was not taking private donations. McCain accepted $84 million in public financing while Obama opted out of the federal system.

Among Obama’s contributors, 5,845 list "CEO" or "chief executive" in their title, compared with 2,597 of McCain’s donors, according to election records compiled by CQ MoneyLine. In the 2003-04 cycle, 3,567 of Bush’s donors were listed that way, compared with 1,686 for Kerry.”

It seems like everyone is looking for a change.

 How much should we tip during tough times? Who should we tip?

Consumer Reports asked a nationally representative sample of almost 1,900 U.S. residents what they gave last holiday season when the economy was already starting to unravel, and the results showed few differences from the year before.

The big recipients—house cleaners, with 65% of respondents who employ them tipping them last year. House cleaners also received a larger gratuity than other service providers, averaging about $50 or an equivalent gift per tip. Child-care providers were also still among the most likely to receive a tip and received the second largest average gratuity amounts—about $38 per cash tip or gift equivalent.

Rounding out the list of service providers who typically receive holiday tips in the survey: child’s teacher (59%), hairdresser (56%), manicurist (51%), newspaper carrier (45%), barber (40%), building superintendent (33%), pet-care provider (30%), mail carrier (29%), lawn-care crew (28%), school-bus driver (26%), fitness instructor (22%), and sanitation worker (14%).  These received and average of between $15 and $25 per gift.

If the tipping budget is tight this upcoming season, Consumer Reports experts recommend that those wanting to express their gratuity allocate tips in the following ways:

  • Give cash to the people you believe need it most.  In many cases an extra week’s pay or the cost of one session is appropriate.
  • Avoid bank-issued gift cards. They might expire or have fees. Even retail cards can be useless if the store goes bankrupt.
  • Give small gifts. For others, consider giving soaps, candles, or baked goods.  Unless you know them well, avoid alcohol or food that might be inappropriate or cause allergic reactions.
  • For those you tip regularly, like a barber or a hairdresser, a small gift or a card is usually an appropriate way to say thanks.
  • Be aware of the rules. Mail carriers aren’t allowed to take cash or gift cards that can be exchanged for cash. The U.S. Postal Service says they can accept non-cash gifts or gift cards worth $20 or less.  School districts may also frown on cash gifts to teachers.
  • For the really tight budget.  A hand written thank you note is always appropriate and can go a long way.

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Gen Y Votes for Job Creation, Voting Problems Begin, 1% Think Bailout Will Help

Voting Problems Expected
Early voting has begun and so have the problems. Reports of touch screen voting machines changing votes are surfacing in West Virginia. Concerned citizens are reporting that the top three offices on the ballet kept jumping from democrat to republican—including the vote for President. People touch Obama and the machines check McCain.

We, a country that can hit an X drawn in the sand with a missile from the other side of the world cannot seem to figure out how to vote. Experts are already expecting problems and the majority of states do not have back-up voting plans.

After all the problems we have had with recent elections you would think that someone would have taken the time to make sure voting booths work properly. Or, maybe a booth that automatically changes your vote is someone’s definition of working properly?

Nearly 80% of Gen Y Voters Say Job Creation is Key Factor in Upcoming Election
Experience, Inc., the nation’s leading provider of career services for college students and young alumni, today announced results from its 2008 Jobs and Economic Survey. More than 12,900 Gen Y voters from all 50 states completed the online survey from Experience, 85% of whom indicated they plan to vote in the upcoming elections.

The survey, which polled undergraduate and graduate students as well as young professionals, found that 60% have seen a significant drop in entry-level jobs since the beginning of the year. Nearly 80% (77%) of them said entry-level job creation was a factor in how they will cast their vote. Midsize to large business stimulation and entrepreneurial activity were also cited as significant factors in Gen Y’s vote at 76% and 69%, respectively.

Survey participants cited the following as the most important issues for the next Presidential Administration:
• Economic stimulation (58%)
• Energy crisis (50%)
• Foreign policy (39%)
• Healthcare reform (39%)
• Education reform (37%)
• Unemployment (35%)
• Global warming/climate concerns (34%)
• Social issues (26%)

 “We were somewhat surprised to see that the pendulum for young voters has shifted away from social concerns, toward jobs and the economy,” explains Jenny Floren, founder and CEO of Experience. “In the past, college students have been sheltered from Wall Street, but in this case, we’re seeing that Gen Y’s concerns mirror those of society at large. This survey shows that job creation is of utmost importance for Gen Y, and they want the next administration to address this concern.”
Participants were given the option to tell Experience for whom they would cast their vote in November. Of the 10,959 who answered this option, 62% said they would vote for Obama/Biden; 21% said they would vote for McCain/Palin.

For more information check out experience.com.

Cuomo Vs AIG; Round Two
Last week we reported that Cuomo was asking AIG to stop payment on crazy salaries and bonuses. Cuomo must have made a good argument because AIG has agreed to freeze millions of dollars in compensation and bonuses. According to the Associated Press, “the insurance and finance giant has agreed to stop any payments under former chief executive Martin Sullivan’s $19 million pay package.”

We think that AIG realizes that it is becoming as hated a company as Wal-mart. Many people may feel like this is too little, too late, but at this point, what else can they do?

And Cuomo isn’t stopping there; word on the street is that he’s now going after Lehman Brothers.

"It is not just compensation but incentives, perverse incentive for executives to produce short-term profit rather than long-term growth," Cuomo said.

Maybe Cuomo should dress up as Superman for Halloween… if the cape fits…

TrueCredit.com Finds Only 1% Think Bailout Will Be Effective
With the government’s $700 billion bailout package now approved for deployment, a survey of 2,012 Americans (commissioned by TrueCredit.com and conducted by Harris Interactive) indicates that:

  • Only 1% of those polled believe the bailout initiative will be very effective
  • 62% of respondents say they feel it will be at least somewhat effective for helping to improve the current economic climate

In the short term, the economic climate is likely to affect consumers’ spending habits:

  • An overwhelming majority (68%) say they have spent or will soon spend less as a result of the current crisis
  • Surprisingly, three in 10 consumers say their spending habits have not and will not change

Other findings:

  • The majority of respondents (55%) say that economic conditions will most affect their discretionary spending
  • Nearly half (47%) say the economy will impact their retirement savings
  • Almost 30% say the economy will affect their interest rates, when they will be able to retire and their investment portfolio
  • Only 24% of those polled feel their ability to be approved for a loan or mortgage will be impacted by the current economic climate
  • Although credit is the foundation for loans, mortgages and other vital financial functions, which have been hit hard by the recent economic turbulence, fewer than two in 10 consumers (17%) believe their credit score will be affected by the current economic climate

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