Don't be deceived by the Dow topping 10,000 on clarkhoward.com

CLARKONOMICS: Is it over yet? Is the tough national economy healed? Is it time to sing "happy days are here again"? That's the message you'd get from watching a lot of media coverage these days.

The problem is that TV poses a 20-second soundbite answer to Clark's questions. But this is an onion with so many layers. Many talk radio personalities are blaming President Obama. But he's not the problem or the solution in Clark's estimation.

The solution is that we need to change our expectations about government and our own lifestyle.

Right now, a lot of companies are reporting good profits. The Dow is one economic indicator that has now topped 10,000. Yet the true measure of unemployment called U6 is still hovering near 17 percent.

Interestingly, the Dow first topped 10,000 in 1999. That means we've gone nowhere fast as investors for the last decade. Throw in the housing market's bubble, peak and bust, and the budget deficit at the federal level, and you'll see that we are in a world with conflicting signals.

Our entire national economic dilemma was a long time in the making with overspending on the personal, corporate and government levels.

Pointy-headed economists debate whether we're having a "V," "W" or "L" recession. Just trace the letter and you'll get an idea about how each economic model plays out. Only in hindsight can you be sure which is correct.

Clark's guess is it will take at least a decade to work off the excess of borrowing money for lifestyle. That may mean that houses get smaller, cars get a little older and we have fewer possessions.

The consumer champ once owned a house built in 1937. The master bedroom's sole master closet was all of 2 x 1.5 feet in dimension! During those Great Depression years, that was big enough for a middle-class husband and wife. Today, a closet of that size would never work. Some people have so much clothing that they can go for months without wearing the same thing.

We must change how we live and lower our expectations about services we expect government to provide. Deficit spending on Medicare, Medicaid and Social Security is unsustainable.

The only solution is to get your own financial house in order by working off debt. The economic hurt is not a cute story with a tidy ending as news outlets would have you believe.

What others are saying

recession or depression
There is no difference.If you are out of work,can't pay your bills or loosing your home, you are in a depression. What is the problem? We were kept in the dark for 20 or more years as to what was really happening in the country. Greed was what was happening and no one in power wanted us to know or do anything. They encouraged spending because it made the economy look good. None of our leaders had the guts to tell it like it is and still don't. Now they want us to believe all is better. Hooray.. The stock market is up. That's suppose to make us feel better. Doesn't work anymore, congress. We have lost faith in you and don't believe anything anymore. We are really done. Time for a revolution.
By carolyn godfrey @ 10/27/09 06:24:25 PMreport abuse
Jobs and Social Security and other public aide
Social Security should be an "insurance" collectable by US Citizens who have paid their 40+ quarter in, or who have become disabled trying to do so. Social Security and welfare should be only for citizens and legal immigrants. Emergency medical and a bus ride home should be all we offer anyone who is here illeagally. Anyone found employing an illeagal person should get a stiff fine the 1st time and their business seized the next time. Lifting that burden alone would save the US from this depression.
Those poor little citizens that illeagal mommies came here to birth could be left with legal family members or go home with their parents like our citizens do when born out of the country. In central California you can't get most jobs unless you are Spainish speaking and few jobs are advertised at all. Non-Spainish speaking applicants are turned down when they apply to work in the fields and packing sheds...because they can't understand instructions from the non-English speaking formans.Applicants are also turned down for jobs such as teaching and office work they otherwise qualify for. Getting these lawbreakers off our backs would lighten the load for the health care system too.

Question:
What area of the country has the most job openings?
By Shirley @ 10/21/09 02:34:11 AMreport abuse
Closet
To the point about the closet: It is somewhat flawed. Closets were smaller back in the day b/c people relied more heavily on furniture to hold their clothes. Yes closest have become oversized, but I bet the sale of wardrobe armoires and bureaus have declined in relation to population.
By What Can I Do For America @ 10/20/09 01:12:23 PMreport abuse
Sean Hannity
Clark please put some sense in to Sean Hannity he keeps blaming President Obama.Do you know that when he talks about the Prsident he addresses him as Obama I think Sean has an issue that the Prsident is black!!!
By Jehan Waniagtunga @ 10/20/09 05:44:19 AMreport abuse
Health Care
Why in the world, with our economy the way it is, are they pushing for this health care reform? Wouldn't it be better to wait until our economy is in better shape to look at the reform then? Yes, people die without the proper health care, they also die of malnutrition from lack of food because of no jobs. All of that additional spending will just put us so deep in debt that our children will have slant eyes.
By Al @ 10/19/09 10:06:54 PMreport abuse
Buzz G is correct
In his comment below, Buzz G said we should get the government out of the lending business. I suggest we go a couple steps further and get them out of the economy, except for law courts to handle contract disputes and fraud. We like to keep church and state separate because government has no place interfering in our personal beliefs. But isn't the economy just the sum of all the financial decisions individuals make about what career to pursue, what to spend, what to save, how to allocate limited resources, etc.? Aren't those all personal decisions that deserve to be free from government interference, just like the decision of what god or gods (or no god) to worship? Those who value personal liberty want the government out of our personal lives.
By Mr. Pibb @ 10/19/09 09:38:46 PMreport abuse
Job
YEAH, I finally got a job after months of unemployment! HA HA , I AM LAUGHING AT YOU DOOM AND GLOOMERS!
By Joe Chicago @ 10/19/09 09:01:04 PMreport abuse
Ignore the media and just look around you
Just as the media reported for years about a recession that only happened after they convinced everyone that there was one, they now hope they can create a recovery just by convincing everyone that there is one. Since so many people have given up looking, the 10% unemployment rate is probably closer to 15%. The DOW hitting 10,000 is little more than inflation from the printing a trillion dollars hitting the stock market. As soon as people start trying to actually spend that money, it will hit the rest of the economy. Until the madness with "health care reform" and "Cap-n-Tax" is behind us, there will be very little real movement in the economy out of simple fear and uncertainty.
By John the Econ @ 10/19/09 05:19:21 PMreport abuse
Unemployment
Clark it would be nice if you would try and educate people on unemployment and inform them that it's a lagging indicator and not a current reflection of the economy. It is quite common for unemployment to briefly continue increasing as an economy exits a recession.
By Curt @ 10/19/09 01:47:46 PMreport abuse
Why is it we suffer but BO, Pelosi, Reid all travel, vacation and Kennedy who never worked in his miserable felonous life have money. I make 28,000 doing medical reports and because of offshoring I have never gotten a raise. Sometimes I think it is time to just leave this world - maybe a better place.
By anon @ 10/19/09 01:13:55 PMreport abuse
Dow 10k
Well, we have pretty much given up on the government and wall street (both in lower case intentionally). My husband and I are both unemployed. But, our house is paid for as are our 10 year old cars, daughter's education is saved for and we own 6 acres with orchard and garden. We have pulled out all retirement funds from big brokerage houses and put them in CDs in local credit union. While we are not making a whole lot, we are at least somewhat safe from market fluctuations but better is we are no longer supporting oppulent lifestyles of those in finance. My opinion is that it was all orchestrated to allow the rich to become richer and the poor to become poorer and to drop the middle class one more step to the poverty level.
By Judy @ 10/19/09 01:04:07 PMreport abuse
DOW 10000
What they won't tell you is that they remove stocks that have gone into bankruptcy or stocks trading below $10. Then add stocks that are doing well. Wait until they add apple and google to the dow and see how high we go. Just an illusion
By CB @ 10/19/09 12:40:43 PMreport abuse
The only people who are celebrating DOW 10,000 are the ones that the recession never affected in the first place - and in many cases, the very ones who were a huge contributing factor to the collapse. Ask the regular guy who lost a job, can't find another decent paying one, and has a family to support and bills to pay and had run out of unemployment if he cares one bit about DOW 10,000. These punks in Washington are such hypocrites.
By anonymous @ 10/16/09 04:22:55 PMreport abuse
Yes America has seen her best days. We are in a long decline as we now have more people taking payments then those paying into the system.
By anonymous @ 10/16/09 03:43:35 PMreport abuse
Dow tops 10000!
Dow Topping 10000 because of news like JP Morgan Chase makes profit.... wow.... that's the profit from all the recent changes to extra fees, higher interest rates, unfair terms and agreements before the Credit Card Holders Bill of Rights Act goes into full effect in February.

Hurray!!! The goverment should have more bills like Credit Card Holders Bill of Rights Act so that we will pay more to bank so that our stock market will go even higher!!
By JJ Wayne @ 10/16/09 11:36:45 AMreport abuse
Personally, I can't believe that politicians can look others in the eye with a straight face and say the stimulus is working as planned. It isn't working at all unless you work for the government. Once people can learn to live within their own means, a lot of these problems will start to take care of themselves, regardless of government meddling, which NEVER will do any good. (even though they will take the credit when things start to turn around)
By anonymous @ 10/16/09 11:00:41 AMreport abuse
Consumer
Wanting things is not bad, it's good. By wanting to consume, we produce. The problem comes in when gov't gets involved. In the past, people who didn't have the incomes to service the debt didn't get the loans. Along came Democrats who passed the CRA act requiring banks to lend to people who did't have the income, created Fanny Mae and Freddie Mac and then put these mosters on steroids. A huge bubble ensued. Republicans didn't have the guts to bust the bubble because they would be blamed for ending the good times. But we need to get the government out of the lending business. Eventually the economy will repair itself.
By Buzz G @ 10/16/09 08:17:10 AMreport abuse
Dubya
We are in a Dubya-shaped recession. :-D

(Not pointing blame, just couldn't resist a joke. Actually, I've read Clinton had his part in the housing debacle by encouraging mortgage lending to people who weren't financially ready.)
By Lee @ 10/16/09 01:36:54 AMreport abuse
We are all so spoiled! We want what we want when we want it! We need to start living within our means, and stop trying to keep up with the Jones's. The most important things in life aren't things. The most important things are the relationships we have, namely our family.
By Nancy Blan @ 10/15/09 04:41:59 PMreport abuse

recession or depression

There is no difference.If you are out of work,can't pay your bills or loosing your home, you are in a depression. What is the problem? We were kept in the dark for 20 or more years as to what was really happening in the country. Greed was what was happening and no one in power wanted us to know or do anything. They encouraged spending because it made the economy look good. None of our leaders had the guts to tell it like it is and still don't. Now they want us to believe all is better. Hooray.. The stock market is up. That's suppose to make us feel better. Doesn't work anymore, congress. We have lost faith in you and don't believe anything anymore. We are really done. Time for a revolution.

By carolyn godfrey @ 10/27/09 06:24:25 PMreport abuse

Jobs and Social Security and other public aide

Social Security should be an "insurance" collectable by US Citizens who have paid their 40+ quarter in, or who have become disabled trying to do so. Social Security and welfare should be only for citizens and legal immigrants. Emergency medical and a bus ride home should be all we offer anyone who is here illeagally. Anyone found employing an illeagal person should get a stiff fine the 1st time and their business seized the next time. Lifting that burden alone would save the US from this depression.
Those poor little citizens that illeagal mommies came here to birth could be left with legal family members or go home with their parents like our citizens do when born out of the country. In central California you can't get most jobs unless you are Spainish speaking and few jobs are advertised at all. Non-Spainish speaking applicants are turned down when they apply to work in the fields and packing sheds...because they can't understand instructions from the non-English speaking formans.Applicants are also turned down for jobs such as teaching and office work they otherwise qualify for. Getting these lawbreakers off our backs would lighten the load for the health care system too.

Question:
What area of the country has the most job openings?

By Shirley @ 10/21/09 02:34:11 AMreport abuse

Closet

To the point about the closet: It is somewhat flawed. Closets were smaller back in the day b/c people relied more heavily on furniture to hold their clothes. Yes closest have become oversized, but I bet the sale of wardrobe armoires and bureaus have declined in relation to population.

By What Can I Do For America @ 10/20/09 01:12:23 PMreport abuse

Sean Hannity

Clark please put some sense in to Sean Hannity he keeps blaming President Obama.Do you know that when he talks about the Prsident he addresses him as Obama I think Sean has an issue that the Prsident is black!!!

By Jehan Waniagtunga @ 10/20/09 05:44:19 AMreport abuse

Health Care

Why in the world, with our economy the way it is, are they pushing for this health care reform? Wouldn't it be better to wait until our economy is in better shape to look at the reform then? Yes, people die without the proper health care, they also die of malnutrition from lack of food because of no jobs. All of that additional spending will just put us so deep in debt that our children will have slant eyes.

By Al @ 10/19/09 10:06:54 PMreport abuse

Buzz G is correct

In his comment below, Buzz G said we should get the government out of the lending business. I suggest we go a couple steps further and get them out of the economy, except for law courts to handle contract disputes and fraud. We like to keep church and state separate because government has no place interfering in our personal beliefs. But isn't the economy just the sum of all the financial decisions individuals make about what career to pursue, what to spend, what to save, how to allocate limited resources, etc.? Aren't those all personal decisions that deserve to be free from government interference, just like the decision of what god or gods (or no god) to worship? Those who value personal liberty want the government out of our personal lives.

By Mr. Pibb @ 10/19/09 09:38:46 PMreport abuse

Job

YEAH, I finally got a job after months of unemployment! HA HA , I AM LAUGHING AT YOU DOOM AND GLOOMERS!

By Joe Chicago @ 10/19/09 09:01:04 PMreport abuse

Ignore the media and just look around you

Just as the media reported for years about a recession that only happened after they convinced everyone that there was one, they now hope they can create a recovery just by convincing everyone that there is one. Since so many people have given up looking, the 10% unemployment rate is probably closer to 15%. The DOW hitting 10,000 is little more than inflation from the printing a trillion dollars hitting the stock market. As soon as people start trying to actually spend that money, it will hit the rest of the economy. Until the madness with "health care reform" and "Cap-n-Tax" is behind us, there will be very little real movement in the economy out of simple fear and uncertainty.

By John the Econ @ 10/19/09 05:19:21 PMreport abuse

Unemployment

Clark it would be nice if you would try and educate people on unemployment and inform them that it's a lagging indicator and not a current reflection of the economy. It is quite common for unemployment to briefly continue increasing as an economy exits a recession.

By Curt @ 10/19/09 01:47:46 PMreport abuse

Why is it we suffer but BO, Pelosi, Reid all travel, vacation and Kennedy who never worked in his miserable felonous life have money. I make 28,000 doing medical reports and because of offshoring I have never gotten a raise. Sometimes I think it is time to just leave this world - maybe a better place.

By anon @ 10/19/09 01:13:55 PMreport abuse

Dow 10k

Well, we have pretty much given up on the government and wall street (both in lower case intentionally). My husband and I are both unemployed. But, our house is paid for as are our 10 year old cars, daughter's education is saved for and we own 6 acres with orchard and garden. We have pulled out all retirement funds from big brokerage houses and put them in CDs in local credit union. While we are not making a whole lot, we are at least somewhat safe from market fluctuations but better is we are no longer supporting oppulent lifestyles of those in finance. My opinion is that it was all orchestrated to allow the rich to become richer and the poor to become poorer and to drop the middle class one more step to the poverty level.

By Judy @ 10/19/09 01:04:07 PMreport abuse

DOW 10000

What they won't tell you is that they remove stocks that have gone into bankruptcy or stocks trading below $10. Then add stocks that are doing well. Wait until they add apple and google to the dow and see how high we go. Just an illusion

By CB @ 10/19/09 12:40:43 PMreport abuse

The only people who are celebrating DOW 10,000 are the ones that the recession never affected in the first place - and in many cases, the very ones who were a huge contributing factor to the collapse. Ask the regular guy who lost a job, can't find another decent paying one, and has a family to support and bills to pay and had run out of unemployment if he cares one bit about DOW 10,000. These punks in Washington are such hypocrites.

By anonymous @ 10/16/09 04:22:55 PMreport abuse

Yes America has seen her best days. We are in a long decline as we now have more people taking payments then those paying into the system.

By anonymous @ 10/16/09 03:43:35 PMreport abuse

Dow tops 10000!

Dow Topping 10000 because of news like JP Morgan Chase makes profit.... wow.... that's the profit from all the recent changes to extra fees, higher interest rates, unfair terms and agreements before the Credit Card Holders Bill of Rights Act goes into full effect in February.

Hurray!!! The goverment should have more bills like Credit Card Holders Bill of Rights Act so that we will pay more to bank so that our stock market will go even higher!!

By JJ Wayne @ 10/16/09 11:36:45 AMreport abuse

Personally, I can't believe that politicians can look others in the eye with a straight face and say the stimulus is working as planned. It isn't working at all unless you work for the government. Once people can learn to live within their own means, a lot of these problems will start to take care of themselves, regardless of government meddling, which NEVER will do any good. (even though they will take the credit when things start to turn around)

By anonymous @ 10/16/09 11:00:41 AMreport abuse

Consumer

Wanting things is not bad, it's good. By wanting to consume, we produce. The problem comes in when gov't gets involved. In the past, people who didn't have the incomes to service the debt didn't get the loans. Along came Democrats who passed the CRA act requiring banks to lend to people who did't have the income, created Fanny Mae and Freddie Mac and then put these mosters on steroids. A huge bubble ensued. Republicans didn't have the guts to bust the bubble because they would be blamed for ending the good times. But we need to get the government out of the lending business. Eventually the economy will repair itself.

By Buzz G @ 10/16/09 08:17:10 AMreport abuse

Dubya

We are in a Dubya-shaped recession. :-D

(Not pointing blame, just couldn't resist a joke. Actually, I've read Clinton had his part in the housing debacle by encouraging mortgage lending to people who weren't financially ready.)

By Lee @ 10/16/09 01:36:54 AMreport abuse

We are all so spoiled! We want what we want when we want it! We need to start living within our means, and stop trying to keep up with the Jones's. The most important things in life aren't things. The most important things are the relationships we have, namely our family.

By Nancy Blan @ 10/15/09 04:41:59 PMreport abuse

Listen Live:

Clark On Demand:

Clark's Advice:

Consumer Action Center:

Quick Links:

Clark Media:

Call The Show:

Oct 15, 2009 -- Don't be deceived by the Dow topping 10,000

What others are saying