Another Election Year Another Recession

The Business press are all agog over the fact that we might be heading for a Recession in the economy. Well DUH! If they bother to pay attention to their own records they will see that after every Multi-Term Presidency we tend to have recessions. It is part of the Business Cycle, and yes that is probably why it is called a “Cycle” rather than a line.

Lets face it it happened in 2000-01, 1992-93, 1975-76 and so forth and back all the way to the beginning of the country. It is an historical fact that one can look up for themselves (if they weren't so lazy). How does this happen? Why does this happen?

The main cause of this, if anyone really pays attention, is that the current President cannot run for another term, being limited to two four year terms by the Constitution, and the business community and investors start getting jittery over who will take over running the country. The whole economic philosophy can change depending upon who wins the election (that is why when a sitting VP that has a similar philosophy to the outgoing President gets elected, the cycle is delayed until they themselves leave office).

If there is a change of party then of course the whole economic scenarios change (albeit rather small) and therefore different types of investments are needed to survive in the different environments. Of course it also depends upon the personality and policies of the new President, as some Republicans act like Democrats and vice-versa.

Of course who is running Congress can have a major effect, and usually if the same party runs Congress as the White House, we are guaranteed to have a Recession, that is why Mid-term Elections usually see a change in Congressional make up.

This is good for the country as we depend upon the Checks and Balances between the different branches for our own well being and civil liberties. Regardless of what the immature sour-grapes , namby-pamby naysayers (on the left and right) are whining and crying about, no opposition politician has been assassinated, jailed, or otherwise in the last 8 years, so our basic liberties are still intact.

So what can we do if we know trouble is coming? Well prepare for it and survive the stormy seas.

Well the most important thing to do is to make out and stick to a budget.

See what you can live without as far as unnecessary items are concerned. Put something away for emergencies and planned big expenses (vacations, graduations, weddings, etc). Make sure all bills are as up to date as you can make them and pay off all that you can. This way you don't have debt hanging over your head and you can have a bit more financial freedom.

Maybe a change in your shopping habits can help as well. Buy some of the store brands when doing your grocery shopping. They are not as much of a fall-off as you think, and the quality is the same (in fact due to the government inspections etc. they have to maintain a certain level of quality before they can be put on shelves). Another thing would be eating less Red Meat and more fruits, vegetables and poultry. Not only will you cut down on your grocery bills, but also be healthier for it to boot. Talk about a Win-Win situation!

Now I know what it is like to be a “victim” of “downsizing”, rightsizing” or what ever the moronic newsreaders are using as a euphemism for a layoffs, so I know how traumatic it can be. Especially when the business folds or the office you are working in closes up. It is harsh and somewhat degrading to go through and collect unemployment for a while. But take the time to learn new skills, or at least brush off the rust of old ones you haven't used in a while. Most of all do not despair nor panic. If you were smart and prepared you will come out all right. If not, then pull yourself up by the proverbial bootstraps and get moving, vowing to never be unprepared again.

A recession is coming but it doesn't have to be a catastrophe if you are prepared for it and act in an intelligent manner. Take control of your finances and they won't control you.

Mahalo.

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