Negative marketplace developments affecting business and government seem to be coming with an increased tempo and intensity. It reminds me of the title Miles Davis chose for his 1990 album that practically invented jazz-rock, which he called “Bitches Brew.”

In my state, California Governor Schwarzenegger had to sign an order laying off thousands of part time state workers because the profligate spenders in Sacramento couldn’t agree on a new budget. Real estate billionaire Sam Zell called his Tribune purchase “The Deal From Hell” in a Business Week Magazine interview. From tiny hamlets to the nation’s largest metros, politicians are cooking up “fee” increases because they are too timid to say they plan to increase your taxes in any way you’ll tolerate.

Since the private sector has to compete for your dollars by delivering something resembling value, the scenario is a bit different. But, why is it that at companies grossing $100 Million or $10 billion the refrain is the same: We can’t afford that and we need to cut expenses. Ok, I know that the #1 priority for any business is to survive, but from my wonderfully naïve point of view, the short answer is pension costs, Wall Street, debt, and a scarcity of hope, not necessarily in that order.

Most of us have at least a nodding acquaintance with debt, certainly that of the mortgage or credit card variety. Having the debt is one thing, servicing it is another. Since I’ve been in broadcasting all my adult life, let me give you a real life example. A leading TV station in Los Angeles was owned for decades by one well known person until about 1987 when it was sold—twice. First KKR the buyout firm paid the original owner several hundred million dollars for the station, its real estate and a number of accompanying sound stages. They quickly “flipped” the property for over $500 million to a national media company. Owner #1 could of course be benevolent, kind, loyal, generous and even visionary, because his cost of entry to the business was comparatively modest and debt was miniscule. But, the new owners spun off management of the sound stages and eventually sold off the real estate because of the pressures of debt service. It was their employees who began to get a daily message saying “we can’t afford that.”

I’m fond of saying that I don’t even approach the knowledge of an economist, but like a good Boy Scout, I can read the rocks and twigs on a trail. From my vantage point, many things will get worse before they get better partly because demands for services (think medical insurance) along with entrenched entitlement thinking plus a dollop of pure greed are driving the economy in unwanted ways. The Bitches Brew that I’m seeing is the trinity of uncontrolled government spending, the growing pension burdens in all sectors and the speculative bubbles in real estate and many private equity deals.

So much of this reminds me of “Tulip Mania” which gripped Holland in 1636-37 which may have been the first significant speculative bubble. Basically, simple tulip bulbs were sold and resold at ever increasing prices until a single bulb could cost as much as several acres of land! It worked until common sense and rational thinking stopped the game. You can read about it in the book Extraordinary Popular Delusions and the Madness of Crowds, written by British journalist Charles Mackay. I’d be interested to know if you see any parallels with what we are going through right now.

Wall Street is a marketplace and it is all about the money. As a fundamental capitalist, I admire visionary entrepreneurs who operate well run companies. You simply can’t have healthy communities without the jobs and other benefits that spring from enterprise. But, some of the huge private equity deals of the past few years bore little resemblance to owning real businesses operating on reasonable margins. Money tends to be smarter than the people handling it sometimes and we are seeing billions of dollars looking for safer shelter these days.

Regarding pensions, just consider the following. More than three-quarters of the nation's traditional private pension plans are underfunded - which means they currently don't have enough assets to cover the benefits already promised to their workers and current retirees. And the Pension Benefit Guaranty Corp. (PBGC), the government insurer that is supposed to guarantee workers some protections if companies go under, is facing a deficit of almost $30 billion. No advanced degrees are necessary to understand the economics of that one.

The diminished sense of hope is what really bothers me and that is a loss that we really can’t afford. With it, most things are possible but without it even routine tasks become unbearable chores. There is great stress and a gloomy mood swirling through our country right now. Even that acerbic iconoclast Miles Davis might agree that we are seeing a non musical but very real “Bitches Brew.”