If you are or someone in your organization is dong PR or marketing of your product, consider the following:

*Is anyone in that function calling reporters or editors two days before and event?

*Are all your releases stamped ‘FOR MMEDIATE RELEASE when there really is no time constraint to what you are trying to get across?

*Are you attaching two line headlines to the pitch?

*Is the most important part of the text buried three paragraphs down?

*Is this release really a news item or just ‘something’ about your product you think is important?

*Are there so many numbers crushed into the first couple of lines, it takes time to get to the real story?

*Are you getting angry when reporters on a list respond with a request to be removed?

All of these mistakes and more are in the dozens of press releases I get just as a freelance writer every week.  What a mess.  It seems as if the basics of PR have been lost along the way.

I know I can help.

Laura Bell

Freelance journalist

Author

PR consultant

SME expert

writer@well.com

Peter Shankman is a PR guy from New York.  I never heard of him until about six months ago.  A friend, also a writer, recommended that I subscribe to his email list: HARO www.helpareport.com .  The acronym stands for “Help a reporter out.”  Reporters knew for years he had connections with experts in all sorts of fields.  When one asked for experts on African soil, it took him five hours to get an answer and that’s when he decided there had to be a better way.  He started a Facebook group and the rest, as they say is history. He now has 80,000 subscribers and earned a $1M over the past year.

Currently, if you subscribe, and I do, you receive three emails every weekday.  There is one text only ad at the top of the newsletter.  There is nothing fancy or any specific layout.  The newsletter simply supplies information for the readers, both journalists and experts who want to get some publicity by putting their name on a reporter’s story  There have been others, but no one designed a model so easy to use and Shankman has left his competitors grinding their teeth in frustration.

Shankman saw a niche that needed filling and he stepped up and made out like a bandit.

The five founding members of Linkedin.com also seem to have hit on a niche.  We all need to stay connected and it gets harder the more we stay glued to our computers 24/7.  The founders started out with 350 contacts and asked all of them to invite their friends.  The site now hosts close to 50 million users and they are in 200 different countries.

Getting connected is important to humans and it is a needed shared by all demographics.  These folks hit on a great idea and others have been following.  Social media truly has changed the world.  Old friends to potential employers check out people on Linkedin.  If you don’t have a profile, it may be held against you when job hunting.

Experts, otherwise known as PR consultants, have been needing the inside scope into how to get in touch with editors for as long as I have been in the publishing world.  In the mid 80s, two ex staffers for a regional magazine got together in a bar and launched “The Bulldog Reporter.”  It launched via hand to hand by these guys speaking at dinner meetings of writers and PR professional groups around Los Angeles.  At the time, it was $101 dollars a year, if I remember correctly.  It provided PR people with the inside scope on what editors wanted and how they wanted to be pitched to.  This enterprise has been resold two or three times, expanded with other services and is still running strong 26 years later.

Niche businesses don’t take much many times to get started.  Look around and see what needs people are having since the onset of the recession.  They don’t have time to take care of their animals in many instances.  In Los Angeles County, hundreds were being turned into animal shelters.  Some, of course, was because of financial reasons.  You might consider fliers in your neighborhood for a dog walking service.

Coupons are a big thing since grocery prices went through the roof.  A couple of Moms have done quite well by starting a website that found the right coupons for certain cities.  The fee was small.  You might find a couple of friends willing to go and apply something similar among your contacts.

Niche businesses start small in many instances but are easy to expand when the need arises.  The Bulldog reporter now offers additional services, daily newsletters, conferences, etc.  (www.bulldogreporter.com ).  Peter Shankman has another newsletter already in the planning stages.

Niche businesses make great sense during the financial times our country is experiencing.

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Last week’s biggest issue was the evaluation of a business that was already up and running.  Entrepreneurs come in asking for a set figure in return for giving up a certain percentage of their business.  Most offer to give away a much too small amount; and in some cases it causes them to lose out and have their trip be for naught.

A group came in with a company that sells designer belt buckles.  They were asking for $500,000 and this was based on current sales and what they were willing to give away.  No matter how the numbers were put together, it didn’t add up.  The business owner wanted the sharks ‘to see the bigger picture.’  That translated to sales he hoped to have in the future.  Obtaining venture capital doesn’t work that way; or, at least it shouldn’t.

The next most important issue that either makes or breaks a deal here in the ‘Tank’ is sales.  Do not come to them or any other venture capitalist with only a prototype of a product.  A couple of them did just that and it wasn’t enough.  They want to know sales during the past year.  They want to know the dollars you brought in and also how much was left over.  In other words, what was the net on the sales you made?  They want to know the projections for future sales.  Do you have orders?  Do you have a distribution chain lined up?  Have you been going to trade shows?  And in some instances, have you approached a major competitor, for a possible sale.  They and any other venture capitalist want to know if you see the big picture.

Knowing your market is also a part of it.  They want to know and do ask regularly how big the market is for any given product.  One woman had designed gadgets to insert into meat while it was cooking on the grill.  It told the chef whether or not it was well done, medium, etc.  The person had the numbers on how big the grilling business was.  It is huge.  George Foreman made a couple of mints on his grills.  That information along with her previous planning got her the deal.

Additional factors that come up:  do you know your competition; how much of your own money have you put into the business already?  Many details turn out to be important to the Sharks.  One man revealed to his determent that he had a personal bankruptcy.  That lost him the deal.  The Sharks concluded that theirs wouldn’t be the only money he would ever need to grow his business to its fullest potential.  If it came time for him to go to a bank and ask for more money it wasn’t going to happen.

Some of the misconceived ideas entrepreneurs come in with include thinking they are going to give away only 10 or 15 percent of their company in exchange for a big chunk of money.  It doesn’t work with these guys and I’m betting it doesn’t work with banks or other venture capitalists.  Get real when it comes to asking for financing.

Some of the entrepreneurs seem taken with the idea that one of the Sharks is going to help them.  The only they are doing is trying to do is make more money for themselves by investing with one of the small business owners.

The Sharks also want to know where and how you are going to use your money.  They have learned since the late 90s when entrepreneurs took investment money and threw wild parties.  That time is over.  Also, be prepared, if asked, to know when you will be able to pay this money back.

This show is a business class on prime time television.  If you don’t know when it is on in your area, search the tv guide website.

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I just went through a “Who’s on First?” interaction with some bloggers who mistakenly thought they were running a business site.  I have “Google Alerts” set up for the Bell Business Report.  About three weeks ago, I started getting notices of a blog that used the BBR in part of their name.

I wrote to those folks first politely asking them to cease using my name.  They didn’t know what I would be bothered about this.  They thought it a common name for a business report that did a ‘wrap up of the news.’  Obviously, their business education didn’t and doesn’t extend any farther that copying specific economic numbers for the day and posting them on their site.  They had no clue how valuable a name of business is.  Big lawsuits have been fought over these issues.

A couple of weeks went by and I had no further Alerts announcing use of my name.  Then the beginning of this week it popped up again.  I repeated the same message.  I was answered in angry words wanting to know, “…why do you keep doing this?”  I re-explained thinking that I wouldn’t hear back from them.  Lo and behold, later than same evening they wrote telling me they had picked a new name.  I am sure they didn’t do this because they were convinced it made sense, but because they wanted to get me off their back.  It doesn’t matter.  The result was the same.  I don’t have to worry someone is going to Google the Bell Business Report and end up on his page.

Your company’s name is one of the most important things about your business.  It represents to the public who you are and how you want to be perceived.  In picking a name, that you want to have the legal rights to use in your state, you need to file a DBA, doing business as.  It then becomes the Secretary of the State’s job to run a search to see if that name is available for use in your state.  If so, you are granted the use of the name for a time period.  After which, you will then have to pay another fee to get your right to it renewed.

There are also many ways during our Web 2.0 or 3.0 era of being able to search out domain names to see which ones are already taken.  During the middle 90s, the Web wasn’t as organized regarding domain names.  One very famous biggie in the marketing industry confided to me that he was going to have to go to court to keep his website’s name.

Let’s move on to another egregious error that I run into time and again.  Do not tell the general public that you are test marketing your business.  It makes you sound like a fool.  The term being used now-a-days is beta.  The word used to be used solely to describe someone working on either a new computer program or a video game.  People were working on it to try and get the bugs out.  Now, I see businesses advertise time again they are in beta.  This is used as an excuse as to why they can’t pay the people they want involved in their business.  Recently, I discussed this with one guy who thought he knew the skinny on publishing sites.  “I’m in beta.  They, referring to another company I had used as an example; they have just raised $15M.  You can’t expect me to be able to offer what they do.”

I told him to go back and get decent financing.  If he tried using people without paying them, he wasn’t going to succeed.  I didn’t bother telling him that it went against the laws of economics because I would have been wasting my breath.  He kept rambling about how he was going to change the world of journalism and build a site with new technologies.  “Who, are you kidding, these types of sites have been around for a decade,” was how I responded.

They guy didn’t know what he was doing; didn’t know what he was talking about and didn’t care, apparently, that he shared this lack of knowledge with the rest of the world.

All I can say is that if you want to have a shot of having a successful business, look at what others have done, what they are doing and even more, how they got there.  Stop diving into the deep end without finding out what awaits you at the bottom.

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So, we can see by that reasoning simple hard work isn’t going to guarantee us anything other than we might be farther down on the pink slip list.  What is one to do?

I told him about four years ago when I was too ill to sit in front of a computer and I was stuck with just my disability check. I found an out.  I have always crocheted and took it back up.  I started a small project.  Others were astonished and before I knew it, I was in the crochet business.  It turned into a nice supplemental income.

The demand for computer repairs isn’t what it once was.  If someone gets too frustrated, they simply buy a new one.  Sometimes, the repair costs just aren’t worth it.  But my friend could still keep another revenue stream going with the knowledge he has.  I am thinking he was in the state of just wanting to complain.  He wasn’t interested in pursuing another outlet at the time.

We can’t afford to sit still and wait for things to get better.  Because, truth be told, the market niche you’re in might not get better. Sitting still and tensing over every negative report on the economy is going to do anything but make you ill and ready for the unemployment line.

Do you have a decent job that might be around for awhile, but has you going nowhere?  Sign up for night classes and latch on to another skill before the pink slip shows up on your desk.

Douglas Adams, since deceased, came to fame with his series of “Hitchhikers Guide to the Galaxy.”  The inside jacket of the books revealed what he had to done to earn a living before he got the writing bug.  One stands out in my memory.  He had been a ditch digger.  We all need secondary skills if we wish to keep the roof over our heads and food on the table.

Many have hobbies that can be turned into revenue streams if push comes to shove.  Well, push has come to shove for most of us.  Handmade items always have a market no matter how bad things are.  For small fees these items can be sold on eBay.  If you have sewing skills, there is a market.  People throw clothes away these days because they don’t want to take the trouble to get them altered.

If you had a talent for languages back in college, sign on to one of those programs that promises you will be speaking like a native.  Check out your local court system and find out about their need for translators.  People with language skills have doors open that are closed to the rest of us.

If you are in a corporate environment where you feel there might be some cutbacks close to you, take on extra work your colleagues can’t seem to get to.  This way you may learn just a little something extra that might keep you around longer than your colleagues.

Look for anyway to keep a Plan B going and in this state of affairs, you might even have to go a few letters down the alphabet in order to keep all your bases covered.  Stop griping about what isn’t happening and learn something new so you can make it happen.

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The time it is not only SSI disbursement but what is allowed under Medi Cal.  They are talking about taking out our trips to the eye doctor and the dentist.  This is a very big part of life for those who will go without if this is removed.

The percentage of monthly checks this time around is 2.3 percent.  In case you are not up-to-date on the issue, there is already one cut scheduled for May 1.  Yes I, too, am a SSI recipient.  However, my monthly disbursement is now divided between retirement benefits and the disability fund.  Translated, this means the cut for me is smaller.

The example used in the Bee talked of a man who was going to lose more than $20 a month and for him that was a big thing.  For me, that’s a week’s worth of groceries.

It isn’t easy earning SSI benefits.  It can be a fight that lasts two or three years; and now, we find out the fight isn’t over yet.

Now, this isn’t the whole picture.  When it comes to who is cutting what, I always turn the California State Controller’s website: http://www.sco.ca.gov/ .  According to a small piece on the homepage, California has enough money to pay its bills for the rest of the year.  Ok, so what’s going on?  I have found conflicting information more than once on this site.  If anyone knows, they aren’t talking.

Now, let’s get realistic about the budget issue.  There are only so many cuts one can make and continue to have a budget work at all.  If cutting allowances was the answer, the budget crisis would have been over years ago.  It’s time to start thinking more realistically.  The biggest contributor to any state’s budget is the businesses that call the state home.  California hasn’t been a friendly place for business for years.  All you have to do is look at any Chamber of Commerce’s roster of businesses and see how many were there five or ten years ago. I am talking about increasing revenue.

It is simple: start a committee whose sole purpose is to seduce businesses back to the state.  I don’t care what it takes.  Promise them no taxes for six months.  It doesn’t matter.  More business means more jobs; more production; more sales tax; more buying and a large increase in the state’s GDP.  It means that things, economically speaking, will improve and show the rest of the world how to conqueror a budget problems.  Cuts only work in the short run.  What I am proposing will change the long run picture and the positive effects will be here long after the current state legislators have retired and turned the reins over to the next bunch.

In the meantime, stop picking on the little guy.  It’s a shame and it should embarrass those currently in office.  How are they going to explain themselves to any parents or relatives who are on SSI?  This whole pattern needs to be revamped.

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Laura Bell

writer@well.com

818-448-1193

Other countries lend the US money and then there are government bonds and securities that the Fed sells to the public.

This worry is this debt will be passed on to other generations.  It’s not good, but the various government bailout programs were born out of necessity.

I have heard some who think we should be content with living on wages that the Third World Countries, dream on.  Not likely.  One of the reasons the economy expanded since the 50s and 60s is more people. More people means an increased in demand, which requires more goods and leads to higher prices.   Our current economy can only shrink so far before it collapses.

Now, I am not claiming huge debt is good under any circumstances.  I am saying without the bailouts you would have seen riots in the streets.  It would have been a worse scenario than your wildest nightmares.  If the Feds hadn’t stopped the bank collapses, what would have happened the next day when you wanted your money?  True, it was insured to a point, but if you had to wait for an insurance to pay out while the bank was shut down, just imagine for a minute what your world would have looked like.  How many times in a week do you stop by the ATM machine because you are running short of cash?  They would have been shut down and no, you can’t use another company’s ATM because there is no longer an active account in your name through the bank that collapsed. It would have been chaotic.

If banks were allowed to close, it would have created a panic for the other banks.  There are still copies of photos around of people in line waiting to get their money from the banks during the 30s.  God forbid we have to live through something like that.  Our grandparents weren’t hooked on ATM machines.  It was easier for them to revert to barter than this spoiled generation.

Ok, we have had the bailouts, There are billions floating companies that would have collapsed if left alone.  All of this has to be paid back some day down the road.  What are we as individual consumers doing as responsible citizens in this whole picture?

In order for consumers to be ready to deal with a better balanced economy, they have to live with less than they ever thought.  Suze Orman has been predicting we are going to have to live on half.  If you have a two income family, you need to learn to live on one salary and put the other check away.  Hard stuff to grasp.  Not likely, anyone is actually going to be able to meet those guidelines in the next few years.  We live too far out on the limb.

However, if we don’t start somewhere, we’ll not see the end of this mess for a long time.  We still have companies who find it efficient to outsource a portion of their workloads.  It’s a sad fact.  We need to take a look at why and try to encourage corporations to leave the work here in the U.S.. But, if they feel they can’t afford us, that isn’t going to happen.  Agreeing to work as a temp might land you a job with a company who would have outsourced the position..  Let the temp agency pay the benefits.  These days if you work for 90 days in a row, temp agencies pay health benefits.

No one is going to bank one spouse’s total check.  We have spending patterns ingrained to the point it takes the threat of being homeless to make us change.  However, you can take a good percentage of one partner’s check and stash it.  The other new recession advice from Orman is, “…stash the cash.”  Do any thing that will make that happen.

Start changes in your family and take any chance you get to talk about the changes you are making with your personal finances to friends, family and business colleagues.

Is there a chance that some of the bailout money will be misused by the recipients?  Of course, there is.  We already saw the incident with the AIG bonuses.  Thankfully, the flack from the press, etc., created enough pressure to correct that mess for the most part.  Every human when it comes to money makes mistakes. We can’t change the government and its decisions unless we are willing to run for office.  We can write about the problems and hope someone out there listens.

Take care of your own house and hope that the Federal government doesn’t run out of resources from which to borrow money in our life time.  We can only change the financial mess one person at a time.

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The thing to keep in mind is that many coupons are luring you into buying products you don’t need or wouldn’t ordinarily put on your shopping list.  And the quantities that you have to buy in order to use the coupon keep on increasing.  It used to be you bought one item and you got the discount.  Now, it may require you buying two or three of the same item in order to qualify.

There are also a lot contingency coupons.  The latest one I have seen is buy $25 of frozen food and get a $10 coupon.  Not many buy that much frozen food.  Apparently, there has been a slowdown in purchases of that product.  It would be interesting to see how well that promotion is going.  I wouldn’t fall for it unless I had a large family and a freezer to go along with it.

Then there is the thing about we were all taught that making things from scratch in the kitchen would always save us money.  Well, not any more.  I got in the mood to cook a stew and searched for a recipe.  I went to the store to pick out ingredients.  One small package of stew meat now equals to more than $5.00.  By the time I would have been finished with the vegetables and the needed spices, the price would have been near $15 or more.  Buying one of the skillet dinners frequently advertised on television was only $5.99.  It took only a few minutes to warm it up.  Cooking from scratch unless you find a discount grocery store or warehouse is not good for the budget anymore.

Also look out for grocery stores’ rewards programs.  Most only give you back a small discount after you have bought a couple hundred at their store. And maybe you get the discount sent four months down the road.  Consumers, for the most part, are into instant gratification.

I find myself saving coupons that I might use on a day that I have some extra cash since it’s a product I’d like to have, but in most cases, would pass up.  Kind of the opposite of what coupons are suppose to do for us.

If you happen to find a Sunday newspaper that has coupons you would use without hesitation, then it might be a good idea to buy two copies.  Or, look around to see if someone in your circle buys the same paper and offer to swap for the one’s he/she might use.

Don’t settle for the coupons in the store’s circular or the Sunday paper.  You can Google grocery coupons and find offers any day.  Most sites ask you to enter your zip code, so you have a better chance of finding coupons useful locally.

If you prefer to use a store’s site, there is always the chance you can find a product that your store doesn’t carry.  So, you need to be prepared.

Coupons can be useful, but it takes a fine eye to read the small print and sit back and think before jumping into the fray.  Do I really need this brand?

The evening news in Southern California has been running tidbits on women who are making a name for themselves with a blog or website that deals in, clipping coupons.  They show the results of their shopping.  This isn’t the complete picture.  If this shopper usually earns say, $10 an hour and she has spent 40 hours a month with her coupon thing, and saves $200 a month on groceries, now look at the picture.  She has actually lost $200 in her effort to saves.

I am not saying to give up on bargain hunting.  I am saying to look at the whole picture before jumping in.  A bargain is a bargain if it is a good deal today and 30 days down the road.

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Let’s look at the 30s and our current economic state

Are we going down farther than we already are? Even though I couldn’t find a reference to farmers burning their crops during that time on the Web, they did. When they couldn’t get any money at all for their hard work, they set their crops on fire. They did hold onto corn since it could be used as fuel. If markets go down so far, then the goods are either handed over or destroyed. That is what we are seeing. The reins of corporations are changing. Let’s hope other businesses, like Enron aren’t abandoned and closed completely. Those who held the reins violated the principle of economic efficiency. If you don’t use those resources to run a profitable business, you lose them.

Hopefully, we wouldn’t get to that point during this downturn. We don’t want to see people burning their homes in lieu of turning them over the sheriff when they come calling.

There is much talk about how Obama is going to jumpstart the economy either via tax cuts or another private economic stimulus package. This is short term money dealing with day-to-day expenses and purchases. We have much bigger problems to churn over.

We had an economy that was running on hot air, sort to speak. It was all based on the premise that prices and value would continue to go up. If value, on real property, durable goods and the stock market, continued then escalating prices would continue. Someone came up with the idea that we needed business plans. Inherent in this concept is that sales will increase dramatically. A limited article on Wkipedia pointed out how much trouble that caused during the dot.com explosion. New business owners all envisioned tons of money coming their way. When it didn’t happen, problems; well, you know the story.

Ok, everything, price wise doesn’t go up by large percentages. The price of homes in the 50s rose only about 10k by the end of the decade for the medium range. Prices were stable. There were no inflation worries and we had few sources of credit in that time. We didn’t need them. Stable wages and stable prices make for a happy group of people. No one had informed us yet that we should buy things, other than homes and cars, and pay for them later.

To keep an economy going with the constant use of credit, there has to be a belief that salaries, values and prices will continue moving up into the stratosphere. We also need a population of consumers willing to go along with this vision. All this is to say that we have seen the end of unheard of rise in the value of real property. There is more to this than just real estate. The value of autos has to be also included. I have a feeling that car dealers are going to be about as popular as someone selling sand on a beach. The value on this product is decreasing, and the terms of the alleged dealers are getting more sleazy as the days goes buy. I have seen commercials by a guy hawking cars in the greater Los Angeles area with the promise of selling to anyone for a $95 down payment.

Times aren’t even going to be back where we were even with the promise of tax breaks and more refund checks. Those promises only deal with the short term. They say nothing about the other values we have discussed here. It also doesn’t deal with the fact that businesses are still caught up in the track of projecting gigantic increases in sale volumes. That’s how they were able to pull in investors. If things got, better, than everyone gets paid off, big checks and everyone is smiling. Sales projections are going to have be downsized for future projections.

Ok, what’s next and how are we going to deal with it? The biggest problem in my humble opinion will be acceptance. Can we deal with the idea that things are not going to back seeing the profits that we did with flipping houses, etc.? This is not to say that those folks will die out. There will be a smaller amount of folks trying to make a profit in this market niche. Profits will also diminish in other market niches.

Everything will be in disarray for quite awhile. There is really only one way to deal with all this rationally, one step at a time. Plans for spending, housing, employment and business expansion need to be looked at in a while new manner. Look at what you can afford today with the realization that there may never be more money in the future. There may not be raises coming down the tube. Businesses may continue to shrink. Sales may stay stable, no new growth, at least for quite awhile. Do not make a move in any part of your financial life that will ask for money you may or may not have down the road.

Keep your eyes on the economic forecasts and ongoing changes in the economy. Keep yourself informed like it was a matter of life or death. And, it is, your financial life.

Change is still coming in big waves. Exactly what and how is anyone’s guess until the new president has a chance to settle in.

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]]> http://writer60.wordpress.com/2009/01/21/lets-look-at-the-30s-compared-to-our-current-economic-state/feed/ 1 writer60 http://writer60.wordpress.com/2008/12/28/how-does-the-government-mess-with-the-economy/ http://writer60.wordpress.com/2008/12/28/how-does-the-government-mess-with-the-economy/#comments Sun, 28 Dec 2008 07:47:21 +0000 writer60 http://writer60.wordpress.com/?p=121 ]]> We have all heard that our credit problems are because of the government. I don’t think so. Prior to the depression, the government’s attitude towards the economy (aggregate market), was to leave it alone. We all know the results.

Now we have a government that uses fiscal policy (public spending) to adjust the economy. If you have never heard of this, simply Google the term and you will get a brief definition. Previous to the government spending aspect, the only way governments could get money if they needed it was either taxation or seizure of private property.

Fiscal policy/government spending is a tool used by the Federal government. You know the government allocates a good portion of money every year to government contracts. If all this was left to the private sector, things would be worse than they are. Now, I am not saying that I endorse the way the government awards contracts. I’m just saying that they do.

They also have the right to either lower or raise taxes and institute new ones if they are able to get such a law through Congress.

The other side of this coin is monetary policy. Monetary policy refers to how the Federal Reserve’s use of interest rates and the money supply to guide economic growth.

The overall theory goes like this: once interest rates go down; there will be more activity in the aggregate. If interest rates are down it is a green light for borrowers to go ahead and apply for more loans. It also makes it easier for the lenders to get customers to sign on the bottom line. It is an encouraging sign for the stock market. If there is more borrowing, there will be more corporate expanding and an increase in products sold (GNP). When such announcements come out, they, the stock market, respond by having a day where there is more buying than selling.

The Fed has other tools by which to expand the money supply. An expanded money supply encourages growth. (In case you are wondering the definition of the money supply is so complex, it takes an economist to try and explain it. There is also controversy over which figure the Fed uses to make its decisions. Enough already.)

When the Fed feels there isn’t enough money in the money supply, they can lower the banks reserve ratio. All banks have a reserve ratio. The rest of the money they take in, they put out in loans to earn money. You really didn’t think they kept all that money right there all the time I hope. When they are allowed to loan out more, then there is more money in circulation.

Then there is the business of government securities. You have all heard of T-bills and other treasury bonds. The Fed has the right to buy and sell them. If they want more money in circulation, they issue a buy order. Customers with bonds they had been holding go to the nearest Federal Reserve Bank and sell their bonds. They are issued a check, which they are going to go and deposit in their bank. This money prior to this deposit never existed. There is, as we know, nothing to back it other than the full faith of the United States government. The bank, on receiving the seller’s deposit, only keeps its reserve requirement portion of the deposit. The rest is circulated to others who apply for loans. They then take the loan check and deposit in their personal bank. The same thing is repeated until that original check for the sale is exhausted. Now, that money is in circulation, less whatever the reserve ratio was for the individual banks.

As bad as things are in the current economy, if the government didn’t have the tools of monetary and fiscal policy, we would be a lot worse off and have fewer options. When things are bad, we always tend to blame the government. They are doing all they can to keep the wildfire that’s sniffing out our financial system from causing a complete collapse. As I said, the only thing that keeps the monetary system going period is that we have confidence in the United States government. Once that confidence is gone, everything will collapse and we will be looking at a situation that makes the depression of the 30s like child’s play.

The only thing we can do now is take care of our own personal finances and write to the legislators if we don’t like what they are doing at their end. Their adjusting the system is not what caused the mess we are in. We had a bunch of greedy corporate bigwigs who thought they could do what they want and we had a whole financial system that came very close to mirroring Enron.

If the government didn’t have the tools it did when those banks collapsed, we would be looking at a situation close to the end of the movie, “Rollover” in 1982. The whole economic system collapsed and there were worldwide riots.

The title of this article was me being factious. We better be glad that the government ‘can mess’ with the economy. This doesn’t mean that we shouldn’t be watching their actions. There is more on the horizon. We need to be dutiful watchers.

For more samples of my work: www.bellbusinessreport.com

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