The P.A.

A weekly address from Patrick Adams,
President of St. Louis Community Credit Union

Something Has to Give

On May 12th, 2014, posted in: Uncategorized by

stick figure dragging "economy" sign

After years since the official end of the recession, we’ve been waiting for something to happen – something that will point to the recovery having some wind in its sails. Well, don’t look to the economy’s performance in the first quarter of 2014. We stink.

We’ve discussed this before, but it’s worth repeating. Our low-to-moderate income community is plodding through quicksand trying to get back on its feet. It is gut-wrenching to continue to witness the difficulty and anguish that comes with everyone trying to get back to even. Those who are working paycheck to paycheck to get by are experiencing a lot of pain – still.

The latest proof that the existing recovery (a loosely used term) is missing our credit union members lies in the loan requests we’ve been receiving. Countless members need $300-$500 for the purpose of paying their gas bills from the winter. This is confirmed as an epidemic throughout the country where consumer spending is up in the area of heating fuel and utilities. In fact, if you adjust out the increased spending for utilities and health care, the economy would have backpedaled in the 1st quarter to net economic growth below zero. OUCH!

I’m not for republicans or democrats, I’m for the consumer, and more specifically our credit union members. It’s been a long, hard journey to date with little improvement. What lies ahead is anybody’s guess, and that’s what the experts are doing – guessing.

The latest anemic numbers that reflect the economy, along with the economists that pretend to be prescient but are far from it, reflect a variety of excuses as to why the first quarter was stuck in neutral. The harsh winter; rising interest rates; shaky European and Asian economies, healthcare spending, and slowed business spending made the “Top 5.” A bad winter is getting lots of play – I hope they’re right.

Shouldn’t spending be “sky high” right now? After all, the tax return dollars hit in the first quarter and a sense of wealth usually prevails when money flows into people’s lives. Where’s that money? It’s either not buying “stuff,” or not enough, that’s for sure.

Here’s my two cents. These other guys and gals who are trained economists are guessing. I might as well guess along with them. As I see it, everything costs more, people fell behind and are playing catch-up, and wages haven’t kept pace. That’s three reasons for a stagnant economy. I’ll go with a bad winter too – to some degree – it does matter.

How does one officially define the economic performance for the first quarter 2014? It goes something like this: “We’re coming off of the second worst quarterly performance of the economy since the recession ended in mid-2009.” That’s an annual GDP of .1%. OUCH!!! That can’t possibly be all weather-related, can it?

I’m stuck in a rant – sorry. We need good jobs that pay living wages. We need business to spend some of the cash they’re sitting on. They won’t spend it until consumers buy more “stuff.” We’re not buying “stuff” because our household expenses are eating up our “fun money.”

With all that is going on, we blame it on the winter? I don’t doubt that the winter is part of it, but come on man… there are some economic underpinnings that need to be addressed. Yes, we had snow-filled roads, but we also have empty wallets. Something has to give.

Rant over.

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