J-
SOM over at
Liberal Rapture posted about how people really don't know what the hell is going on.
I see no "recovery" at all in the traditional sense. I know. I know. Who am I to make predictions on the economy? After watching one "economist" after another get it ridiculously wrong on national television, why shouldn't I join in? Apparently all it takes to become an "economist" is the ability to speak and play guessing games. I am more than qualified as I can speak, play guessing games and push publish on the blogger "New Post" thingy. Therefore I am an economist.
While I agree that the recovery won't be in the normal sense. It really got me thinking about the system as a whole. How in the hell did we get here in the first place? Does anyone know what the hell is going on?
I'll start with the last one. I do think there are some people out there that know what the hell is going on. People like Peter Schiff, Thomas Sowell, Walter Williams and those pesky Austrian school economists over at Mises.org
Peter Schiff back in 2006 said that accurately forecast that the U.S. housing market was a bubble that would soon burst. He also is quoted as saying in 2006, "The United States economy is like the Titanic and I am here with the lifeboat trying to get people to leave the ship ...I see a real financial crisis coming for the United States."
Of course for being a prognosticator of things to come of which nobody wanted to hear, he was subject to ridicule. I'm not going to glorify
Schiff by comparing him to
Cassandra. Although I guess I just did.
The same could be said of the Austrians. Their economics don't fit with the current political and elite class in our society so they are
ridiculed.
The next question which ties back in to my last
sentence is how did we get here?
In my opinion, it's because we, as a public, have been fooled into believing that the solution to our economic woes are the same thing that got us into the predicament in the first place, spending.
Government spending has always been with us, governments tax and then spend. It's as natural as water flowing down a stream.
What isn't natural is what happened during the 1930's. The level of Government intrusion into the private sector was unheard of not just in the US but in Europe as well. Politicians have always been dirty, again
that's natural. What the levels of spending did, was give the
politicians more and more leverage to use to keep them in power.
Take Social Security, FDR was a genius passing that through. What it did was give people something for
relatively nothing, and
guarantee their votes for him as long as the government paid up. Politicians of both parties have been doing it ever since.
The Government has never, except for the ending of the two World Wars, decreased the level of spending compared to previous years. Government continue to grow, even if the economy doesn't. The true evil here is, thanks to the crack
cocaine of
Keynesianism, they spend more, when the economy is at it's worse. Of course where does the government get the money? From tax payers, borrowing or printing.
FDR was the original street
hustler. Not only did he get the country addicted to "Free" government money, but his breaking away from the Gold Standard, made the government printing press more dangerous than all the flu outbreaks in the last 100 years. Fiat money, that's what we are addicted to. Gold used to be $30 an ounce, now it's around the $900 range and growing. The easy money policies, increased consumer credit. The increase in consumer credit made it easier for people to buy. And buy they did. J-
Som hit it on the head when he said:
70% of US GDP is consumer spending. An economy that is based on consumer spending is, in fact, not an economy at all. It is the basis for other countries' economies. Further , it is a sink hole dependant on ever expanding lines of credit and the need for us wee folk to forever be debting to purchase more crap we do not need or want. The model of human beings/American citizens, called "consumers" by our good friends the economists, always consuming more as a way of life, thereby propping up the world economy is dying.
Washington wants us to buy buy buy shit we don't need. The over extension of credit, caused the housing bubble. People that couldn't afford a house, were given easy loans thanks to Fannie, Freddie, Politicians and ACORN. The banks didn't want to do it at first, but once they got a taste of that good government crack, they couldn't say no. So they became the "evil banks preying on the poor." It's easy to blame the banks for giving people money they couldn't pay back, for giving 10 credit cards to people making $10 bucks an hour, but lets not forget what enabled the banks to do it in the first place, the Government and its spending.
Now it's on to the bailouts and TARP. First of all, lets get something straight. The banks gave this money out, knowing full well that the Government would bail them out if they needed it. Why? because the government has been bought and paid for by Wall Street. Both parties get huge sums from Wall Street Banks every election cycle. This last cycle, Obama was at the top of the chart, well next to Dodd. It's an investment to Wall Street. Give the politicians money and a job, before or after office, and they will never be short of cash again. The government can force money from it's citizens, where as banks have to offer incentives. Which one do you think brings in the more cash?
And the system works wonderfully. TARP has given billions to the banks. Who knows how much and to whom. One thing is sure, the politicians in office now won't be short of campaign contributions come 2010 and beyond.
They games the system. It's the public that are the patsies. We pay the bill in the end. It's only a matter of what will be left when the dust settles.
This is more of a rant than anything else, so apologies if it doesn't flow that well.
