Way Back in January 2008, I was discussing the economy with an associate.  Being in a business with a large sector tied to the housing market, we were already seeing the pinch.  The stock market had taken a dip and my associate said not to worry, this was “temporary”.  He assured me that the economic climate was not headed for recession, and that what I was seeing would rebound in three months tops!

I was a bit skeptical, new projects in our industry were drying up.  Home Builders were overextended, inventory of new homes was high and sales were screeching to a stop.

My associate, like many of my Republican friends and many others who post to blogs and message boards accused me of fear mongering and painting a pessimistic picture of the economy in order to boost popularity of my candidate of choice.  They had, after all, twice elected George W. Bush and an admission of economic recession would not only look bad on their choice but make it harder to sell their vote of confidence in John McCain.  McCain had supported most of Bush’s economic policies over the past eight years.

Phil Gramm, came out last July and repeated the mantra, suggesting we were in a psychological recession (putting the blame on the American public’s perception of things) and that we were all “whiners”.  Gramm was the top Economic advisor to John McCain and was forced to go into hiding within the campaign following flack from those remarks.

Fast Forward to Fall of 2008 where the housing bubble had not only burst, but the scrapnel from the implosion began ripping through the country’s financial institutions.  Stocks plummetted, credit froze up,banks began to fail and government began talking bailouts.  Unemployment skyrocketed and words like “depression” and “worst economic conditions since” began being tossed around by not only the Democrats, but the Republicans as well.

The economy’s nose dive undoubtedly helped Barack Obama win the election.  His challenge now is to right the ship.  He has announced his economic team and will begin a push for a stimulus plan in front of being inaugurated Janurary 20, 2009.

My associate, who has a law degree and an alphabet of credentials such as CFP, CFA, CPA, CEPP, CSA, QRP and VP of a local branch of the brokerage arm of mega bank, Citigroup, is spending more time at work.  His parent company’s stock fell 87% this year.  The US government via taxpayer money is providing his company with over $25 Billion dollars of rescue capital, and while the CEO promises he won’t sell my associates’ branch of the company, they have announced a 20% or 53,000 employee reduction putting the worry of unemployment in his office.

Odd, despite all the eduction, degrees, certifications, experience and inside information my associate had at his disposal, I was able to more accurately predict the current state of the economy 10 months ago than he was!

Makes you wonder how useful financial advisors are.  It also makes you wonder if it wasn’t the otherside that had the psychological issues when it came to the economy or with the parachutes of billions of taxpayer dollars, perhaps he was correct and “everything will be ok”, for him at least.

Long time Republic?an Alaskan Republican Senator, Ted Stevens was convicted of seven felony charges stemming for gifts he received but failed to report.  The verdict came down on October 27, 2008. A week later on November 4th, Alaskans went to the polls and cast ballots for their Senate seats.

Yesterday, some 15 days after votes were cast, Ted Stevens conceded to opponent Mark Begich citing: “Given the number of ballots that remain to be counted, it is apparent the election has been decided and Mayor Begich has been elected. My family and I wish to thank the thousands of Alaskans who stood by us and who supported my re-election.”  ~ Seattle Times

What most would think obvious apparently didn’t bother “thousands of Alaskans”.  They voted for a convicted felon!   Most states don’t even allow felons to vote!

In a state where we just heard for two months this mantra of reform from GOP VP nominee Sarah Palin, who served for two years as one of three directors of Ted Stevens Excellence in Public Service, Inc., we see her party almost re-elect a felon?

After the conviction Palin was slow to call for Steven’s to step out of the race.  Many say this was because she thought he could hold the seat and then pave the way for her to appoint herself as an interim replacement. Her public plea for him to step down came only after her running mate, John McCain called for his resignation and abandonment for re-election.

So 40 years of public service for Stevens is over.  Another politician hung by corruption and greed.  Sarah Palin is back in the Governor’s office promising more of her maverick reform.

But what is more of the same?

According to the Center of Investigating Reporting (CIR), it means more Federal Money.

Despite its go-it-alone spirit, sparsely populated Alaska is one of the greatest per-capita beneficiaries of funding from Washington among the 50 states. A major portion of those federal taxpayer dollars in recent years has come from large infusions of homeland security grants and appropriations handed out to the state since the Sept. 11 attacks ~ G.W. Schulz CIR

And where did a lot of this Federal Taxpayer money go, you ask?  Why Wasilla, you betcha!

According to the report:

• Between 2003 and 2007, Wasilla received at least $1.4 million in homeland security grants, including $987,550 from the Assistance to Firefighters Grant program.
•  Using $244,500 in funding from the 2005 grant cycle, Wasilla constructed a 100-foot tall communications tower for its small police force. An additional $148,000 came during 2007, to improve law enforcement communications and to raise the new tower 50 feet after the city realized the one it built wasn’t tall enough.

Wasilla, for which Palin was mayor has a population of around 7000 residents.

“Of course we believe ourselves to be self-reliant but are far more reliant on federal spending and oil taxes, which pay for most of state government expenses, than any other state,” said Gerald McBeath, a political science professor at the University of Alaska Fairbanks. “That’s a contradiction leading to a good deal of ambivalence in our attitudes toward government.” ~G.W. Schulz CIR

Alaska paid residents around $3000 in dividends last year from its Permanent Fund (derived from oil royalties).

With oil prices dipping and a Democrat heading to the Senate in place of Stevens, Sarah Palin may have her hands full trying to balance the Alaskan State Budget.  Dipping into the Permanent Fund is considered political suicide and Federal Funding may be leaner withless money to go around due to bailouts, and harder to come by with Stevens’ tin-cup missing from Capitol Hill.

She may even have to….GASP…RAISE TAXES!   Oh My!

Perhaps she can lend the state some of that $7 million she is reported to receive for a book deal?

Many Americans have gotten a new lesson on Alaska this campaign season.  What are your views on the State and how it is managed, funded and how it elects officials?

When the average Joe or Jill goes for a job interview they must sell themselves to their prospective employer.  If you or I go to the bank for a loan we must show our credit worthiness and in some cases offer collateral.

The current economic storm has shown us some things that make average people’s heads spin!

We heard about the AIG spa resort outing while the company was sinking and later reports from ABC NEWS of secret, expensive junkets after additional bail-outs to the firm.

Now the CEO’s from the U.S. automakers are on Capitol Hill begging for a “bridge loan”.  No one disputes that the auto industry is hurting, although these CEO’s unsurprisingly wash their hands of any responsibility in their company’s losses.

So how did these CEO’s get from Detroit to Washington D.C.?

Yes, you guessed it!  Expensive corporate jets!

General Motors CEO Rick Wagoner arrived on his comany’s cushy Gulfstream IV, ABC News reported. Ford CEO Alan Mulally flew in on a private company jet as well. ~ Reuters

Spending $13,000 -$20,000 round-trip to ask for money from taxpayers who can barely afford to drive across town to visit relatives for Thanksgiving seems a bit stupid and sends the wrong message.

Maybe, GM, FORD & Chrysler should have the heads of their Marketing Firms speak for them in Washington instead.  They haven’t been able to move cars lately, perhaps they could move Congress.