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Random Observations by Pat Ostrye

Believe It Or Not, The Countdown Has Begun!

    The predictable disaster I mentioned last week, also six months ago, is now in full swing.  According to the L.A. Times and every news broadcast on TV these past few days, all corners are being affected:  housing, the economy, airlines, auto manufacturers, plus transportation in general, and joblessness with a capital J!!

   For starters, a 53-year-old wife and mother in Taunton, Mass. fatally shot herself and left a suicide note, over the foreclosure of their home because of lapsed mortgage payments.  There could be more fatalities that have not yet come to the fore, due to similar despairing catastrophes.  It's beginning to sound a lot like the Depression of 1929!

   Closer to home, the Governor of California has decided to slash the wages of 200,000 government workers down to the minimum wage of $6.55 an hour temporarily in order to balance the budget.  Thankfully, for the working poor, John Chiang, the State Controller, refused to go along with it.  Interesting how the Governor didn't mention slashing the salaries of the legislators who could probably weather such an action for a couple of months, but hit the most vulnerable who would not be able to handle summons from Edison, AT$T, the Gas Co. or the water department, for immediate payment of their monthly bills.  To say nothing of impatient landlords or finance companies knocking at their doors!  However, I think the Governor and his advisors hadn't planned on arousing a state of anarchy among those that he believed were his subservient underlings.  We'll have to stand by for further reports on that proposal!

    Also affecting the working poor, Medi-Cal funding of clinics has been suspended as of July 24th.  This action forces clinics, nursing homes and adult day centers to go after outside sources of income, i.e., banks, foundations and private donations to help them get through the summer.  Many of the providers tell of outrageous interest rates for temporary loans. 

    Speaking along those lines, the U.S. Treasury Secretary Henry Paulson, has a real dilemma.  He hadn't banked on such problems as having to organize the $30 billion Federal Reserve loan to bail out JP Morgan's purchase of Bear Stearns or how to handle the Fannie Mae and Freddie Mac upset.  Then there was the call from Federal Chairman Bernanke for substantial new government regulation of investment banks.  Probably his biggest dilemma is whether or not to endorse the administration's determination to extend the President's tax cuts of 2001 and 2003.     

     Re: the auto industry, it couldn't be worse.  Ford, GM and Chrysler have declared that their current losses are the worst ever, forcing them to lay off thousands of workers.  Where will they go?  How will the government handle the unbelievable rate of unemployment checks?!

     Then there's the MTA board's proposal, at the request of Mayor Antonio Villaraigosa, for a half-cent increase in the County's sales tax, bringing it to 8.75 %.  It will take a two-thirds vote in the November 4th election if approved by the Legislature to go on the ballot, and would lead to several dozen transportation projects in the county over three decades.  In these hard economic times, even a half cent increase will give many food for thought, particularly if small town residents feel that their own communities have nothing to gain. 

     Unfortunately, I think it's safe to say that the worst is yet to come!!

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