1977-1988 were the root cause years of today’s dilemma; when after the failing of this country to pay for the Vietnam War, we drove up inflation and interest rates and sought a political solution instead of an economic one. We’ve never been able to face economic reality since – not even within the Clinton years when the budget was balanced by inordinate earnings of the technology bubble.
The net effect of this political policy was that we simply printed more money and priced not only our products, but the cost of building our products out of the world-wide competitive marketplace. Once we factor in the devastating monetary policy, we understand that gasoline that has a pain index to those using the dollar, has a pain index of $2 to those using the Euro and only one dollar within the producing states. This disproportionate pain again exacerbates the domestic economic dilemma. And no, it is not an option to convert the US system from the dollar to the Euro.
We also took away the critical key to economic correction - PERSONAL SAVINGS - by encouraging spending in tough times rather than encouraging savings as was accented in the 1880s to recover from the post Civil War Depression and again in the 1930s/1940s to recover from World War I and the poor political economic policy of the consumer based roaring twenties.
We are so far out of kilter, that I'm not sure how we can get back into shape without a major depression which will again level the playing field.
BOTH political parties, by claiming and reinforcing the false claim that this is a consumer spending based economy are doing nothing but building the requirement for bailing out overbuilt industries, including consumer based service industries.
It's far easier to understand - economically - that when we have too much capacity within a single industry, the industry is overbuilt and therefore must retract. As a result the excess capacity, by pure law of supply and demand, will be trimmed by lack of ability to market its production and the least efficient or capitalized will be closed down purely by lack of profit. In America, we currently have numerous such overbuilt business and service sectors that have been artificially propped up by poor policy. Certainly, it can be argued, that allowing the free market to take these effects will cause a deep economic recession where job loss will be prevalent. This would be far less painful, if America had not been allowed to become so dependent on consumerism; on imports; and thus a nose-diving dollar. But the facts remain. The only thing holding up this economy has long been false assertions and claims, and the motive for maintaining is to protect businesses at the expense of consumers, rather than vice versa.
The economic bubble must be deflated rather than allowed to collapse if this nation’s economic future will be recovered. There will be much pain, and gnashing of teeth. Great institutions will be forced to face their own folly and many may not survive. In an uncontrolled manner, the damage will be cataclysmic. Within a controlled process, the pain will be extreme, but manageable.
Not once have I heard EITHER Bush or Pelosi talk about the causes of this near hyper inflation (when measured in true economic terms).
The critical cause is FUEL and ENERGY.
The alternative energy bill is again, a politically driven sham to provide economic kickbacks primarily to Archer Daniels Midland - (look up the political contributions of ADM and its primary ownership Mark Andreas and associates and their history and you understand both cause and affect). Florida Power and Light and others have also been direct recipients of these kickbacks.
Under any previous American historical picture, regulations which artificially withheld production within the US would be altered to affect policy; and if gouging was taking place, regulatory authority would be implemented to correct it.
But deregulation has taken away any control or ability to respond. Instead corporate power and monopolistic control have allowed the stranglehold of excessive energy costs, and limited true alternatives to the internal combustion engine and other technological solutions to be slowed or stopped.
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