Thinking About Fear

by Fred Cederholm
Real solutions come from THINKING. They are NOT driven by fear. Like in the Mad Hatter fairy tale, the US public is loudly crying: “Where is OUR rabbit?” Meanwhile, our leadership and political parties are quietly asking behind closed doors “Where is the hat?”

I’ve been thinking about fear. Actually I’ve been thinking about our national situation(s), the coming elections, the major political parties, pension draw downs, unemployment, the FED, the US Treasury, and September/ October/ November surprises. Ah to live in “interesting” times... We are witnessing a noticeable change of heart in not only what is spoken/ unspoken in private, but also in the shriveled poker faces that are now before us in the media, the public appearances, and the preparatory actions of what are about to unfold. Some portents/ omens have begun to appear before us for all to see. Others are actually appearing in the information being reported to us. Some are subtle, others are not.

You see there is trouble in Mudville. The mighty Casey has come up to bat. He is talked about coming to bat. Or, it is said he has already batted. Take your pick! Regardless of what is happening, what is anticipated to happen, or what has already happened; the game has NOT turned around. No amount of spin, hype, botoxed faces, and blatant un-truths (make that lying) will change anything. The game MAY not be lost, but it will soon be if “We the People...” don’t see a quick home run.

America has experienced downturns before. These have worked there way out by a spending public opening up their wallets for credit cards, or newly printed greenbacks. Our current crisis is one of over-consumption, too much debt, governmental incompetence, and greed. What has “worked” before is now the cause of it all. Everybody knows this, but may not acknowledge it. There is nothing easy in the playbook. As usual, an overstretched public is looking to the government for some miracle pill. Problem is that governments (at the local, state, and Federal level) are even more over-stretched than the public. There is no wonder cure. The public is mad as hell. We have a midterm election, the campaigns for which will soon begin in earnest – if they haven’t already begun that is. And... it isn’t going to be pretty.

It is not unusual to see “some” turnarounds occurring in any midterm election. This time may prove “different.” The Democrats control both Houses of Congress and the White House. They sense the pulse of the public and are afraid of their losses. Will they lose control of the House of Representatives? Will they lose control of the Senate? Will they loose control of both? True leadership is lacking. President Obama may be secure in his position for two more years, but Speaker Pelosi, and Senator Reid are not. The pendulum will swing, but how far? For us in Illinois, these financial and election undercurrents are the same. It is almost an identical situation here in the land of Lincoln, if not worse?

The problem is the Republicans are putting forth no radically changing solutions. They are locked into their same old, same olds as we have heard from them for decades. While the Repubes are not quite so afraid of the Dems as the Dems are of them, they have their own worries about the Tea-Baggers who are attacking them from the right. This is NOT being openly stated, but just look at who is getting the media attention. The Dems are being trashed. The Repubes are losing the front page coverage to the Tea-Baggers on the national stage. I personally don’t see any workable solutions coming from what the Tea-Baggers or the Dems or the Repubes are saying right now. Will one come forth with workable ideas before November 2nd? They have just over 60 days. I have strong doubts.

We know that the housing market stinks. We “know” that unemployment/ underemployment is well over 20%. We know that record emergency (paying the tax penalties) draw downs of 401Ks and retirement monies occurred in 2009 --- with 2010 set to break even that record. We know that retailers are filing bankruptcies and closing storefronts at the highest levels in decades. We know that commercial real estate is facing record vacancies and in no way can cover the debt service on the existing properties financing. We know the banks are NOT lending. We know the equity markets have not come close to meeting sufficiently a much needed “correction” (downward). We know that our war costs are breaking US/ us. We know our deficits, debt, and existent borrowing is killing us from within. We know that Social Security is now in a negative cash flow situation 28 years earlier than what was projected. We know that our trade deficit cannot continue. Where are the answers and the solutions coming forth?

The FED/ Treasury are changing their tune about the unfolding recession/ depression. Bernanke and Geithner are saying they will take further action. Doing what? More of the same --- that clearly hasn’t worked? Their tacit solution now is to issue more debt and buy it themselves with their own freshly printed fiat (non- backed) money since the global $ugar Daddies are not buying! Meanwhile... they hope no one is noticing. I fully expect September/ October/ November surprises as a diversion from our fears and worries. This will not solve a thing and more than likely will only delay and make an ultimate solution much more costly for generations to come. Real solutions come from TH*NK*NG. They are NOT driven by fear. The US public is loudly crying: “Where is OUR rabbit?” Meanwhile, our leadership and political parties are quietly asking behind closed doors “Where is the hat?”

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

Copyright 2010 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

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This story was published on August 30, 2010.