“…something is out of joint.” -Judy Dench, as Queen
Elizabeth in the movie
Shakespeare in Love.
You may be forgiven if you are thinking the same thing. Seven years after
The Great Recession of 2008, the United States economy seems to be stuck
in second gear. Americans have long considered themselves to be winners
in the world of business and industry. Looking back in history, America
came into being at a most propitious moment. Renaissance inspiration and
enlightenment thinking produced a new age of possibility. Our founding
fathers capitalized on new ideas, focused on the individual, and created
something entirely special. With momentum from the scientific and the
industrial revolutions that followed, America’s place in history
was assured. Measured in so many ways, our institutions and practices
have become the standard for other countries.
Yet we still worry. Questions about our national direction fill the media.
In an election year, we ponder the skills and the economic philosophy
that new leaders will bring to the table.
Looking at national measurements such as GNP, unemployment, inflation,
and household income, we get an idea of where we have been and where we
are heading. Additional measurements may also be useful in uncovering
areas where social policy may be ineffective toward providing long term
positive outcomes. Business formation decline and federal debt relative
to GDP are just a few that reveal we are moving in the wrong direction.
One way to take the politics out of the picture is to see the world from
an accounting perspective. By tracking the flows of money, one can see
the source of all wealth ultimately depends upon how well we conduct business.
As Calvin Coolidge said, “the business of America is business.”
Economics as a course of study can be pretty intimidating. Fortunately,
some perspective is offered by a number of government and non-governmental
entities who seek to provide clarity for the layman. The Census Bureau
and the Bureau of Economic Analysis are a few of thousands of sources
of data collection and analysis. The Tax Foundation clarifies our tax
burden by calculating how many days we must work each year to pay our
taxes. The Heritage Foundation Index reveals how much economic freedom
is offered to each country’s citizens. The Organization for Economic
Cooperation and Development creates a Better Life Index, allowing us to
step back and examine the many factors that comprise “quality”
of modern living.
There are some practical methods to help reduce a U.S. household’s
vulnerability to the uncertainty of economics and investments. How public
policies will affect stocks, bonds and other investments is an important
discussion. If our nation is truly “out of joint,” let’s
see if we can learn something from a review of basic economics and accounting.
For additional financial health information, please attend Torrance Memorial's
Financial Health Seminars.
Stephen Connors is a registered representative offering securities and
advisory services through Cetera Advisor Networks LLC (doing insurance
business in CA as CFGAN Insurance Agency), member FINRA/SIPC. Cetera is
under separate ownership from any other named entity. Stephen is a member
of Torrance Memorial’s Professional Advisory Council.
www.connorsgroup.net. (310) 496-8070. 25500 Hawthorne Blvd Suite 2145, Torrance, CA 90505