Both New York City and State are looking at a fiscal meltdown.
America is involved in a protracted, increasingly unpopular and widely misunderstood war.
Inflation, interest rates and unemployment are on the rise.
Is this 1978 or 2008?
Sometimes, it’s hard to tell. The current occupant of the White House has been a reckless social spender throughout most of his administration – the “No Child Left Behind” and the “Prescription Drug boondoggle” are just two of the most glaring examples.
Like the 1970s era Republican, Richard Nixon, he has embraced a number of disastrous Keynesian policies, most recently an ill-conceived “Housing Bailout” program on top of another poorly thought-out “Stimulus package” that seeks to give taxpayers up to $2500 to “stimulate the economy.”Somewhere, John Maynard Keynes, the icon of failed anti-market economic policies is smiling.
The Dow Jones has reacted to the all this by shedding over 3000 points. The surging price of energy (oil) throughout the first six months of this year and rising healthcare costs have ramped up inflation, while massive government spending has put even more pressure on the credit markets. Locally, high-tax localities like New York City are contracting as they find themselves with LESS in tax revenues and most have to responded, first with higher taxes, fees and fines and subsequently with major cuts in government services.
Is there irony in the fact that a President (G W Bush) who began his administration with one of the greatest stimulus packages ever – the Supply Side inspired ACROSS THE BOARD TAX CUTS, would be undone by his accommodation with Democratic inspired Keynesian policies? Absolutely, it’s a bitter irony.
Even MORE ironic, is the fact that the Democratic Congress that has been in session since January 2007 has seen energy prices (oil and natural gas) rise precipitously under their watch.
The prospects for 2008 look very much like those of 1976. Jimmy Carter, a trained engineer and business owner ran on a campaign of “change” away from the policies of the unpopular Nixon administration, just as Barry/Barrack Obama now runs on “change” and “hope,” and against yet another unpopular President and another misunderstood war.
January 1977 thru January 1981 was the last time a Liberal led House and Senate teamed with a liberal Democratic President and it quickly delivered Stagflation (double digit inflation, unemployment and interest rates) at home and humiliation on the world stage – the failed helicopter rescue of the Iranian hostages, due, in large part, to Carter’s reckless and dangerous Military cuts.
Will Keynesian policies fail AGAIN?
Absolutely.
Will, we (middle and higher income working Americans) pay the price for all this?
Without question!
America faces the same reality that France and Germany do. India and China are not only industrializing rapidly and demanding unprecedented amounts of energy, but are forcing the world to embrace free trade and an ever more open/free market economy.
In an interview with Ted Koppel for the Discovery Channel’s “The People’s Republic of Capitalism,” one Chinese official noted that “Many Western European nations, such as France, England and Germany are more socialistic than we are.” He could’ve easily added the United States and been equally correct.
America has veered away from the marvels of the Free Market over some ill-conceived dream of “financial security,” for established businesses and the jobs they create.
That “deal with the devil” has resulted in the contemporary Corporatism (the highly regulated economy that is today embraced by Europe and the United States).
The 20th Century have clearly shown that there is only ONE alternative to contemporary Corporatism and that is the unbridled Free Market.
The “Command (State Directed) Economy” of socialism has only resulted in massive poverty and mass murder, as the middle and upper classes must be eradicated in order for the state to take possession of their property.
What would a true Free Market look like?
It would look like an ugly rugby scrum, a cannibalizing, free-for-all in which the clever gain and the weak are hopelessly buoyed about on waves they neither control nor understand. In short, it would look like an economic masterpiece.
That kind of economy, although offering little nor no security to neither established businesses and industries, nor the millions of workers who work for them, would deliver unprecedented levels of innovation, scientific and industrial advancement and an as yet unattained level of prosperity for the greatest possible number of people.
Of course, it would also remove government subsidies and sanctions from established industries and bar government from regulating cut-throat competitors out of the market in order to “protect American jobs and American businesses.”
John Maynard Keynes argued that government spending, especially large scale social spending and rebuilding projects actually improved the economy.
J M Keynes was wrong.
Like Karl Marx, John M Keynes was not a trained economist and that showed with his pathetic showing when he debated the great economist and fellow Nobel Laureate Friedrich Hayek.
Sadly over the last six decades, while Hayek may have overwhelmingly won the head-to-head battle with Keynes and Keynesianism, the Keynesians still have a long shot at winning the war.
After all, government not only doesn’t want to be shut out of the economy, it refuses to allow itself to be. So it seems that no matter how badly Keynesianism screws up, it will always have its share of well-connected supporters.
America is involved in a protracted, increasingly unpopular and widely misunderstood war.
Inflation, interest rates and unemployment are on the rise.
Is this 1978 or 2008?
Sometimes, it’s hard to tell. The current occupant of the White House has been a reckless social spender throughout most of his administration – the “No Child Left Behind” and the “Prescription Drug boondoggle” are just two of the most glaring examples.
Like the 1970s era Republican, Richard Nixon, he has embraced a number of disastrous Keynesian policies, most recently an ill-conceived “Housing Bailout” program on top of another poorly thought-out “Stimulus package” that seeks to give taxpayers up to $2500 to “stimulate the economy.”Somewhere, John Maynard Keynes, the icon of failed anti-market economic policies is smiling.
The Dow Jones has reacted to the all this by shedding over 3000 points. The surging price of energy (oil) throughout the first six months of this year and rising healthcare costs have ramped up inflation, while massive government spending has put even more pressure on the credit markets. Locally, high-tax localities like New York City are contracting as they find themselves with LESS in tax revenues and most have to responded, first with higher taxes, fees and fines and subsequently with major cuts in government services.
Is there irony in the fact that a President (G W Bush) who began his administration with one of the greatest stimulus packages ever – the Supply Side inspired ACROSS THE BOARD TAX CUTS, would be undone by his accommodation with Democratic inspired Keynesian policies? Absolutely, it’s a bitter irony.
Even MORE ironic, is the fact that the Democratic Congress that has been in session since January 2007 has seen energy prices (oil and natural gas) rise precipitously under their watch.
The prospects for 2008 look very much like those of 1976. Jimmy Carter, a trained engineer and business owner ran on a campaign of “change” away from the policies of the unpopular Nixon administration, just as Barry/Barrack Obama now runs on “change” and “hope,” and against yet another unpopular President and another misunderstood war.
January 1977 thru January 1981 was the last time a Liberal led House and Senate teamed with a liberal Democratic President and it quickly delivered Stagflation (double digit inflation, unemployment and interest rates) at home and humiliation on the world stage – the failed helicopter rescue of the Iranian hostages, due, in large part, to Carter’s reckless and dangerous Military cuts.
Will Keynesian policies fail AGAIN?
Absolutely.
Will, we (middle and higher income working Americans) pay the price for all this?
Without question!
America faces the same reality that France and Germany do. India and China are not only industrializing rapidly and demanding unprecedented amounts of energy, but are forcing the world to embrace free trade and an ever more open/free market economy.
In an interview with Ted Koppel for the Discovery Channel’s “The People’s Republic of Capitalism,” one Chinese official noted that “Many Western European nations, such as France, England and Germany are more socialistic than we are.” He could’ve easily added the United States and been equally correct.
America has veered away from the marvels of the Free Market over some ill-conceived dream of “financial security,” for established businesses and the jobs they create.
That “deal with the devil” has resulted in the contemporary Corporatism (the highly regulated economy that is today embraced by Europe and the United States).
The 20th Century have clearly shown that there is only ONE alternative to contemporary Corporatism and that is the unbridled Free Market.
The “Command (State Directed) Economy” of socialism has only resulted in massive poverty and mass murder, as the middle and upper classes must be eradicated in order for the state to take possession of their property.
What would a true Free Market look like?
It would look like an ugly rugby scrum, a cannibalizing, free-for-all in which the clever gain and the weak are hopelessly buoyed about on waves they neither control nor understand. In short, it would look like an economic masterpiece.
That kind of economy, although offering little nor no security to neither established businesses and industries, nor the millions of workers who work for them, would deliver unprecedented levels of innovation, scientific and industrial advancement and an as yet unattained level of prosperity for the greatest possible number of people.
Of course, it would also remove government subsidies and sanctions from established industries and bar government from regulating cut-throat competitors out of the market in order to “protect American jobs and American businesses.”
John Maynard Keynes argued that government spending, especially large scale social spending and rebuilding projects actually improved the economy.
J M Keynes was wrong.
Like Karl Marx, John M Keynes was not a trained economist and that showed with his pathetic showing when he debated the great economist and fellow Nobel Laureate Friedrich Hayek.
Sadly over the last six decades, while Hayek may have overwhelmingly won the head-to-head battle with Keynes and Keynesianism, the Keynesians still have a long shot at winning the war.
After all, government not only doesn’t want to be shut out of the economy, it refuses to allow itself to be. So it seems that no matter how badly Keynesianism screws up, it will always have its share of well-connected supporters.
