Monday, May 30, 2011

Depression

Is this a depression? It is in many regards but the government would not want people to know about it. The difference in this depression is that there is a whole lot more money flowing through the system making it seem like it is not as bad as it seems. The result is a jobless recovery because most indications (CPI, Stock Market, unemployment numbers) show one thing but we in the streets see another making it hard for people to see the truth.

Current politicians are addicted to creating these short term results but in the long run we are in trouble. Debt levels are extraordinary and the American public doesn't want to see the truth making the politicians more powerful than they should be. Where do we get this mentality of how to handle recessions?

Most of it is in how we handled the Great Depression. Milton Friedman thinks we did not adjust correctly to the amount of Gold therefore not having enough money supply to cushion the markets. He also states in "Free to Choose" that the government is the major source of economic instability and the main cause to the crisis that led tot he Great Depression.

Paul Krugman thinks that government is not doing enough and that it is imperative that they spend more and grow the government. He feels that spending should be ten times what it is now and has a strict Keyensian theory on economics. He states that Keynesians, and himself, believes that in a recessionary time the government should spend while in boom times they should restrain and work on creating a surplus to spend in bad times.

In this depression there is no room to spend because the politicians created a huge mess during the boom times. This was caused from addiction to debt from the top on down to the bottom. This has made it difficult to spend when people need it and has created this political firestorm that is getting nothing done. What are we to do?

The very people who created this mess are arguing on what to do to save us lowly serfs now. It makes for an argument that the whole system needs a real change and not one debated in the halls of Washington by people who know nothing of what we need or want.

Saturday, May 28, 2011

Central Economic Planning

What is it with the central economic planning that is happening today? The definition of insanity is "doing the same thing over and over again and expecting a different result." Is that what our government is doing today. We are still in a crisis with no end in sight. What are we to do as the average American? Does it matter that I am writing on this blog? I see this government as doing the same thing over and over based on the economic philosophy our leaders love be influenced with. Whether it is Republican or Democrat they have the same people from the same institutions that created the financial meltdown.

For example: Does it make sense to have Timothy Geitner, Henry Paulson, Ben Bernanke, Robert Rubin, Larry Summers, Lael Brainard, Mark Patterson, Lewis Sachs, Gary Gensler, Mary Schapiro and other Goldman Sachs cronies working in the administration of Obama. Bush was not much different and most of these people had an impact on the Clinton administration as well.

The point is that we are letting the same people run our financial system who's choices helped to create the financial meltdown.

The movie "Inside Job" does a good job of showing who was associated with Goldman and how their economic planning helped create the crisis in the United States and the world. We have a situation here in the United States where things are not going to get better as long as we have people in office run by the elite that will not create a free economic market that we are constitutionally obligated to have. The regulations enacted recently do nothing but talk about helping the collective but when in reality they hurt the system because the middle class benefit not at all from what this culture has created.

Who could we elect that would change this system. Someone with REAL CHANGE.