Though, even the Wall Street Journal recently featured an article on the re-emergence of the Austrian School of Economic philosophy, it would appear that President Obama’s administration still neither gets it, nor I am afraid ever will. Key defections by his leading economic advisors, talk of the need for QE II and a Stimulus II, and a political collapse in public confidence suggests a growing awareness that Keynesian policies are not working, as many predicted they wouldn’t. Obama's exciting rhetoric of Hope and Change has left myself and the majority of recent polled Americans disillusioned and disappointed. What I see the administration failing to grasp is twofold:
I-America has a Structural problem, not a cyclical business cycle problem. Though the cyclical business cycle was greatly worsened by the financial crisis, I would argue that the structural problem facing the US is actually a contributor to what caused the financial crisis.
II- America has a Credit demand problem, not a Credit supply problem. It isn’t that the banks won’t lend, but rather that few can any longer afford or qualify (on any reasonably and historically sound basis) to borrow.
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70% consumption GDP... Whose idea was it to ship jobs over seas? GE closed their last plant that makes light bulbs to have them made over seas. Didn't we bail out GE? Lot of gratitude from those assholes.
ReplyDeleteThis is all Bush's fault
ReplyDeleteHe wasuch a loser
Speaking of losing; according to a gallup exit poll after barry's swing thru Ohio on Tuesday
W would beat him in an election heldtoday
By 7%
Now That'sfunny !
I-America has a Structural problem, not a cyclical business cycle problem. Though the cyclical business cycle was greatly worsened by the financial crisis, I would argue that the structural problem facing the US is actually a contributor to what caused the financial crisis.
ReplyDeleteII- America has a Credit demand problem, not a Credit supply problem. It isn’t that the banks won’t lend, but rather that few can any longer afford or qualify (on any reasonably and historically sound basis) to borrow.
Credit supply dried up and the Great ponzi died in 2008 because America , as first shown with the Fannie and Freddie and sob-prime bonds collapse, it could not pay its promised interest /dividends bill.
The casino caitalism was a grest ponzi run by banksters.
These debts were nationalized by a government already itself reaching its credit limits after deficit spending for wars and subsidies to the American economy.
America and its consumers had maxed out their credit.
The assumption here, is that the great Ponzi dollar hegemony system , that relied on Foreign capital supply of credit to finance the long term structural continual trade and government deficits especially military Keynesian money printing.
Its not that "few can Qualify to borrow now" , but that the collateral Quality ,mainly property values used to back up the credit supply are themselves falling in value and do not qualify as good collateral .
The American government and Debt peons do not Qualify now because they were already maxed out on credit before the crisis broke out.
The “good name” of America was trashed by issuing and exporting to the rest of the world trillions of dollars of bonds ,that iwhat proved to be useless Dud bonds criminally certified by the ratings and official regulators as AAA quality.
Neither lenders or borrowers exist now as there are no real profits to be got from extending more credit to high waged insolvent Debt Peons scraping by -paycheck loan to the next paycheck loan- in an insolvent economy whose assets viewed as collatoral already proved to be hugely , fictionally, overvalued
The author doesn't get it. O is trying to destroy the country. When you think of it like that, all this makes sense.
ReplyDeleteO is just the icing on the cake. This started years ago when the government starting putting more and more restrictions on manufacturing and more and more bureaucracies in place. Every "helpful" rule and regulation regulation encouraged businesses to move to less regulated countries.
ReplyDeleteAs jobs disappeared Unions wanted better benefits and higher wages for remaining workers. Car companies paid workers to sit in a room in case the robots broke down.
Government responded by creating free trade to open our markets to cheaper foreign goods, and encouraging manufacturing to leave for more profitable locations.
American manufacturers paying legal wages, mandated benefits and perks cannot compete with a Chinese factory paying pennies an hour to giant workforce unless the US government passed massive tariffs to balance the playing field and as long as China owns our debt that's not happening.
Behind China are plenty other developing nations willing to cut China's wages to produce even cheaper items.
We believed we were smarter than everyone else and that we could build an economy based upon shopping, borrowing and trading money.
We arrogantly thought we don't need manufacturing - we will become the educated elite working in technology and customer service. Then we packed up those jobs and sent them overseas. We import our engineers and doctors on Visa programs.
The baby-boomers watched their parents benefit from the great government Ponzi schemes; medicare, social security, COLAS and ignored the obvious flaws. Now we are SHOCKED that there is no money nor sufficient workers to support their level of the pyramid.
We bought into every bubble and pretended they would never pop. We accepted the idea that home equity loans weren't a second mortgage, that stocks would always go up and houses would naturally increase 10% per year.
We have met the enemy and he is us...