President Obama is going to learn quickly and painfully that the American patience goes all the way to the next commercial break. Change can take generations. Some cities can’t afford to wait that long. Families losing their homes should not stand for this. Nobody’s wrong. In classic American Cowboy tradition, Obama will need to keep firing with both guns a-blazing until the economic pump. As stated previously, it never takes one push to prime a pump.
Are classic conservative economists correct? Should the markets correct themselves? Or are the liberal Keynesian correct and government intervention is needed?
They’re both right.
How the Hell Is that Possible?
Free Market runs with an assumption that the punishment will fit the crime, therefore nobody will want to break the law. Even when it comes to risk analysis, the analysis should keep people in check. It runs on a “black and white” morality scale. No sense in corruption or fraud since, in the end, you will get caught.
Keynesian Economists always need a little more to fight towards. The government can be the rudder that guides the economic boat down stream. 5% unemployment is considered maximum efficiency because then we’re still growing. Like the old church saying, “a church not in the red is not doing enough.” When Keynes developed the theory, 5% didn’t represent millions without work who are looking for work. By today’s standards, the mindset is almost Malthusian (the Catholic priest whose approach to dealing with overpopulation was to let the poor starve if they couldn’t feed themselves). U.S. unemployment only went up 2%. Sounds like a small number until you figure where it comes from. Not only is it almost a million more jobs, but those jobs weren’t cut evenly across the board. Manufacturing, R&D, Tourism, Retail – the industries hit hardest. And if you live and work in Elkhart, IN a manufacturing town that made RVs and mobile homes for the touring retired, your home now runs the risk of being a ghost town. Elkhart County is at 15% unemployment and the city itself is at 18%. Obama is right, the spiral will continue. Like Finn wrote today, the inhabitants of the city are gonna start running before they go over the damn. Those who aren’t trapped in mortgages are going to run. Those trapped are going to try n find work, somewhere. Chicago, Vegas, Austin – if they have white collar skill sets. Then they’ll have to live in shitbox apartment and send money back to their family while they hope someone is dumb enough to buy their now-worthless home. They’re like dried-up gold mining towns. Painting with a broad brush, but you get the grim picture.
The reason both sides are right is because both sides are two sides of a coin that desperately need each other and finally need to admit their dependence. Free Markets are only as free as the efficiency of the policing and enforcing of the rules that govern them (yes, they technically aren’t “free.” It’s a damned term.) Keynesian needs the entrepreneurial spirit that can only be found in Classical Free markets.
It’s not going to take a philosophical argument. It’s going to take an effort. Everybody who can help should help. If the government can help, should we let a philosophical disagreement stop it? This isn’t Rome. We’re not dubbing Obama “Caesar.” At least not today and probably not tomorrow.
Our problems in a nutshell include:
- Unemployed workers with 20th century job skills
- Years of a decreased birth rate resulting in reduced proportional markets
- International lack of faith in the U.S. economy
- Credit industry founded on manipulated corporate portfolios
All this comes from the manipulation of A=SE+L. The real formula we’ve been working on is A=SE+BS+L. I’ll break each of these four down shortly and why it all leads to A=SE+BS+L.
Now try being President Obama
C-HO Mesothelioma Rating: 8. If it goes all the way up to 11, no one will be able to report about it because we’ll be back out in the fields 20 hours a day.
{ 2 comments… read them below or add one }
I liked the economic analysis but it operates from the assumption that some form of free market economy is the best option. The massive bailoutsm as have been noted are almost a nod toward socialism.
Possibly when we look at the dwindling resources in the world and the billions of people all seeking to survive on them, we might see that the days of the multi-millionaire may be numbered.
At CrapCo of course… we hope not.
I think it shows that a market without proper government ceases to be a market. The market didn’t fail. The market was too dependent on the honor system. How do free market capitalists not capitalize on such a loophole?