Times have changed but people haven't

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By Lee Helscel

As this New Year dawns, the changing face of the Corridor is apparent to those who have been here a while. Several years ago the community had a strong rural identity.

Today that dynamic has changed as more people have moved into the gated and ungated developments, and the area feels more like a small city instead of a few isolated neighborhoods along a two-lane country road.

But the phenomenal growth that seemed to be unstoppable has almost come to a halt and the waves from international financial failures are reaching a state that has weathered past recessions without much cause for concern. Retirees with investment portfolios – diversified or not – never dreamed their principal would lose so much value.

Retirement accounts used to be filled with companies that produced goods that generated profit for investors. But it has become harder to compete in any market, and American industrialists have invested in overseas locations and labor – or simply import foreign-made products.

Without the cycle of U.S.-produced goods generating cash flow in the economy, Wall Street looked past blue chip companies and invented ways to make money without manufacturing products. In part, it started decades ago with packaging federally-backed home mortgages for investors to trade back and forth.

Investment ideas grew bolder, more complicated and more risky. The recent stock market crisis came about, in part, because firms started insuring large investment packages – some even reversing the idea and betting that accounts would lose money – and all done with leveraged money.

Somehow the country’s economy has become based on a ponzi-style system of shifting money back and forth – without ever making a product. It sounds a lot like gambling – with the odds in favor of the “house.” And in this game,  the house is the CEOs and corporate officers who get to leave town on private jets – packing golden parachutes – when the scheme goes down in flames.

It can happen because, as those with degrees in economics tell us, money doesn’t really exist – it’s a concept – and what we carry in our pockets is but a promise. It’s a good deal for those who want to amass more than they can use and a great alternative to a barter system.

A really good horse trader – or horse thief – can find himself with a lot of horses. But they are difficult to take to town when he wants a loaf of bread.

With a money system, the trader promises the value of horses sold for bread – and he doesn’t have to pasture the horses or work a shovel. Plus, the money will fit in his pocket where the horses won’t.

But the really good horse traders on Wall Street have figured a way to do away with the horses. It was recently explained that to stimulate this down economy – which is based on growth – that buying with cash won’t help as much as credit spending.

If you bought a Christmas pony for someone, that transaction would merely keep current money flowing. It doesn’t create new money, which is how growth is measured. If you put Dobbin on plastic, that creates new money.

The only other way to create new money is for the federal government to print more cash for the banking system to circulate. Since people without jobs can’t afford to buy on cred, it it is up to Uncle Sam to pull the nation out of this economic collapse.

Printing more currency isn’t the best idea because issuing more dollars causes them to be worth less. What will happen with the new administration is beyond local control, and economists are predicting 2010 as the soonest to expect an upswing.

We have to hope that the New Year will be better than the last. That spirit of hope seems to be alive in the Corridor. Shortly before Christmas, the Marine Corps League reported its best Toys for Tots Drive ever, and the Salvation Army Red Kettle campaign was only a few thousand dollars shy of its goal.

So with all the change, and in the face of economic adversity, some things in the community haven’t changed. Its residents are still generous and do hope for a better future. They hope the newly-elected officials will live up to their campaign promises, keep corruption to a low roar, and do some good for the taxpayers who elected them.