Thinking About Epiphanies

by Fred Cederholm
We are now locked in a totally dark room and have no clue about what is lurking to devour us. Our governments control the light.

I’ve been thinking about epiphanies. Actually I’ve been thinking about cherry picking, unemployment, Illinois, tax increases, gambling, housing, the equity markets, the wider economy, and the dark room. Perception is everything. How a product, a market, a state, or a government is packaged and put forth to the wider world is all that is needed to create a success. Accentuate (false) positives and (diminish or not report) negatives are all you need to do to get the desired effect. Well, not so fast...

You see we have not only just begun 2011 and a new Congress, we have just begun that part of the church year which deals with epiphanies. This marks a time of reflection, of TH*NK*NG, of the search for understanding, and of the pursuit of truth. What is known is evaluated and squared with the situation at hand. The goals are understanding, validating, reconciling, and creating a solid foundation from which we can proceed forward and upward. This concept of epiphany need not be applied only to one’s spiritual development; it can also be an assessment of the society and one’s place within that wider community. We need to have an honest assessment of where we are before we can plan (or prepare) for where we are headed. This is noticeably true for a nation’s citizenry, its economy, and its government(s) in times of financial dislocation. “We the people... need an epiphany right now, trust me. For this we need the facts – the real facts and not the made up ones.

As a student of history, economics, finance, accounting, and banking; I have been fascinated by how we have been systematically kept in the dark (no, make that lied to). Our situations continue to decline and yet we are given only the “guilted/ gilded lily” (which more than likely was made in a Chinese sweatshop in this “wonderful” new global economy). Our state and national leaders, and the main stream media cherry pick what we are fed as data/ information. The data/ information reflect only the dogma of where they want us to be, or where they want us to be headed. If you repeat a lie, a falsehood, or a malapropism enough times it becomes the truth. So they TH*NK...

For example, last Friday we got the latest unemployment/ underemployment “fictions” from Uncle $ugar. Job creation did not make the increases that were sought. Job losses were more than was expected. Yet, we were told that the unemployment figures dropped from 9.9% to 9.4% of the workforce. We have an increase in the negatives, a decrease in the positives, and our situation improved by a half a per cent? The only way for this to happen was to drop 600,000 human beings from the population under consideration. I mean... Uncle told us these folks were no longer pursuing jobs. There is no such thing as a “jobless” recovery, so the lies start here. We are not told THAT truism, however.

Illinois is now regarded as the state with the greatest financial problems. What a BIG epiphany for anybody who lives in the Prairie State!!! Our state legislature is in yet another “emergency” lame duck session. The rhetoric is flowing fast and loose as are the spin and the hyperbole. “We need action because we have a $15 BILLION deficit projected for this fiscal year!” While that is bad, it is allegedly fixable. But... what about the accumulation of the roughly $100 BILLION in unpaid bills and pension liabilities? Somehow, the accounts payable are still conveniently swept under the rug. Our legislature is now not even open and honest about the fixes. Just look at how they are “selling” what is on the table.

Illinois needs a SEVENTY FIVE % increase in state taxes for citizens and a ONE HUNDRED % increase for businesses. While that is a true computation, the increases are from 3% to 5.5% for the people and from roughly 4% to 8% for the businesses. These may seem HUGE in these tough economic times, yet they are not enough to neither fix the problems nor pay the bills owed. We are once again given the option of more casinos, more slot machines, and yet another $1 tax on a pack of cigarettes. Don’t the gamblers and smokers have enough negatives going against them without these? We saw a $4 increase in taxes on a 1.75 liter of booze just before the holidays. CHEERS!!! The so-called sin taxes, plus the tax increases are not enough to fix the problem. Illinois is just too fast and loose spending too much money. Presently TWELVE months of income cover only THREE months of expenditures. Do the math...

What we are seeing in this Land of Lincoln is indicative of a majority of the US states AND the Federal government. The spin from their pronouncements do not reflect what is, and are engineered to downplay the running cancers in the housing, commercial real estate, and construction industries. True we have seen a decline in the monthly increases of defaults, of foreclosures, and of vacancies. Is this due to improvements, or to the fact that the respective populations have been diminished by the gargantuan number of defaults, foreclosures, or vacancies already in the system? We have seen a recent rally in markets where indexes closed the year at pretty much fifty-two week highs. Are these bubble valuations supported by recent earnings? No... Will they be supported by coming earnings? It’s doubtful...

We are now locked in a totally dark room and have no clue about what is lurking to devour us. Our governments control the light. What we feel depends upon their honesty. So... are we sharing the space with a rogue elephant in the room, or a living, but ailing mouse? 2011 should tell us...

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 January 10, 2011.