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ECONOMIC ANALYSIS:

Thinking About Thanksgiving During this Economic Downturn

by Fred Cederholm
Please make contributions of non-perishable food items (or cash) during this holiday season, as they are sorely needed at every food pantry across our entire land.
I’ve been thinking about Thanksgiving. Actually I’ve been thinking about our current problems, the bailout allocations, food pantries, Citibank, and Uncle $ugar Claus. The third Thursday in November we in the US observe a unique American celebration—a time of fellowship, remembrance, and gratitude. We look back upon where we have been, we consider where we find ourselves, and we contemplate where we are headed. Normally we are thankful, but this year the looming uncertainties of what 2009 holds in store will be an uninvited guest everywhere when we gather together with families, friends, and neighbors for a bountiful meal, fellowship, conversation, and yes, to watch the parades and football.

You see, this year there is a voracious “rogue elephant” in all Thanksgiving dining rooms. Allocations in calendar 2008 and the coming 2009 have taken on priorities virtually unseen since the 1930s. Economics deals in the art (and science) of making choices in times of scarcity. Its normal allocation model generally refers to making the choice between guns and butter. In the closing years of this first decade of the 21st century, the allocation model of choices would appear to be that of money center/investment banks versus households—or, more aptly, that of Wall Street versus Main Street.

We find now that State and the Federal governments are channeling their funds—both home and abroad. In prior years, individuals and private groups picked up the slack when both the State and the Federal governments cut back in their relative (and absolute) dollar support of domestic charitable activities. Americans are a generous people, but we too are finding ourselves increasingly tapped out. This is a truism from the largest cities to the smallest little bergs like my hometown of Creston, Illinois. While the discretionary contributions from individuals, households, and corporations are expected to decline in this giving season between Thanksgiving and New Year's, it is doubtful that the State and the Federal governmental units are going to fill in voids of meeting the growing needs of the American family households left behind by any private cutbacks. Priorities of State and Federal governmental units are focused elsewhere, and we all know the logic and reasoning behind their benevolence shifts!

In 2006, over 12.6 million households were "food insecure"—10.9% of all US households. Just last week, the USDA released the summation figures for calendar 2007: 11.1%. Given what has transpired to US/us in 2008, one might only imagine how the numbers will skyrocket this current year. The term “food insecure” was a new one for me. It means “experiencing difficulty in providing the necessary level of sustenance for a household.” This is but a lame attempt to spin that well over 35 million people, including over 12 million children, are going to bed hungry. They are worried about where the next day’s meals will come from. Such a situation is unconscionable in this land of abundance. Yet...it is the reality, even during this week of the normal Thanksgiving feasting!

The Rochelle Area Christian Food pantry, established 26 years ago in 1982, long ago outgrew its original location in the basement of Dr. John Prabhakar’s office basement. It now provides food assistance to upwards of 300 families every month. The numbers keep growing. This is not just a local phenomenon. Please take the effort to make any contribution in non-perishable food items (or cash) during this holiday season, as they are sorely needed at every food pantry across our entire land.

Is bailing out Citibank truly how American taxpayers want their tax dollars allocated? I doubt it!

Over the weekend of November 23, Uncle $ugar Claus, Santa Paulson, and Elf Bernanke hammered out yet another financial bailout. Christmas came early for Citibank in 2008 and that company has much to be thankful for during this particular Thanksgiving week. The American taxpayers will invest/infuse some $20+ billion of new capital into the sinking mega-bank, and will back (as in "guarantee") another $306 billion in Citibank’s worth-less/worthless security investments and loans to keep them afloat for a while longer. But...is this truly how American taxpayers want their tax dollars allocated (not to mention pledging of their tax dollars in perpetuity on their behalf)? I doubt it!

I’m Fred Cederholm and I’ve been thinking. You should be thinking, too.


Copyright 2008 Questions, Inc. All rights reserved. Fred Cederholm is a CPA/CFE, a forensic accountant, and writer. He is a graduate of the University of Illinois (B.A., M.A. and M.A.S.). He can be reached at asklet@rochelle.net.

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This story was published on November 24, 2008.