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This is an off-shoot of the "Economic Stimulus" thread.
Here is my ideology on the entire reason why the US economy is in the trash, and why it continues to be in the trash, and why it will not get any better for years to come. Pessimism? Yes, unfortunately.
You have to look at the root of the original causality of the boom : collapse sequence between the mid-90s and mid-00s.
The original correction came about following the Jimmy Carter era with the Reagan tax cuts. The reduction of taxation in a market economy is nearly always a positive move, both immediately and long term. We saw the growth of the American market along with the increase in globalization in both manufacturing and market spread. The consumer was happy to be back at work, and happy to have more in their pocket.
Then came the Bush Sr. era. We entered into a war, which is almost always positive for economic growth domestically due to the immense spending by the Government. Wars are a simple way to reinvest into the American market. Defense contractors, the military, and many other large employers fill their ranks, enjoy profits, and expand. It is in essence a bailout of the industry, especially following the cuts of the Cold War Era spending.
Following the Gulf War we came into the Clinton era, and the boom of the American market. Consumer happiness was ever increasing in the Clinton era. Fuel was cheaper than it was in the 80s, and it was steady. Market indications were golden, and it was a buyers market. It seemed like anything turned into gold as all of the indexes screamed higher and higher. Dellionaires, Microsoft Millionaires, and many other overnight successes. Henceforth the market would seem to entitle anyone a gain.
Move into the Bush Jr. era and the market grows and grows ever higher. Greenspan by this time has cut the rates to virtually free, presumably in a measure to slow the market's bull run. It backfires due to the banks figuring out a way to market debt shares to the hungry investors. Banks push loans on anything and anyone with a pulse, and house values respond in popular areas with alarming inflation. I say inflation because the market is virtual due to the "free" credit, there is nothing to substantiate the demand, as we would all find out later.
Fast forward to the trailing edge of the Bush Jr. era and we find the housing market is suddenly about to fail. The flags were there long before, but no one heeded them. Foreclosure, failed debt structure to the investors, banks left with no collateral, etc. all lead to the "Big Bank Bailout" in a measure to ensure cheap credit to the American consumer. The credit card industry, and many other credit based industries are soon to follow. Credit tightens and many markets are forced to shrink. Jobs across the country dry up as consumer spending and confidence both sink to low values. The market enters a bear run and suddenly it's political.
Meanwhile the "Walmart" effect is hammering American manufacturing, quality and investment wain further lowering American consumer faith, China rushes in to fill the gap and undercut many markets with easy to produce cheap goods. Complex American goods still are sharing an ever growing competitive market with the Japanese and Europeans which pushes more American manufacturing out of the country in an attempt to gain an edge. Ironically, Japanese and European manufacturers push their own manufacturing into the Southern United States in a ploy to increase their market share and gross profit margin.
Who's to blame for all of this?
The greedy consumer. In every single instance the consumer has a majority role in the market collapse. From the signing of the loan, to cheap goods at Walmart, to joining labor unions. American consumers entered an era of entitlement during the 90s that blossomed into a hugely inflated market in the 00s. The average American is drunk with materialism, greed based weath ideology, and entitlement complexes. Just look around you ... whenever someone complains about something being "too expensive" it's really a cry for "I want it to be cheap, because I want it", very rarely is it ever a real market miscalculation. Very few people want to pay for quality in this market, so manufacturers are all cut down to equal sizing ... allowing the emerging manufacturing sectors in India, China, Malaysia, Singapore, Taiwan, and Korea to swallow up the market.
Labor unions have twice pushed major markets into the international market. Most recently the UAW has muscled the Big 3 into their own epic financial crisis. They are simply a bunch of workers whom formed a mob in an attempt to force their will upon the company. While prior to labor laws in this country they were formulated for honest and honorable reasons, they have since been hijacked as a means of extorting their own greedy demands out of the companies. Pensions, over-market value salaries, extravagant benefit packages, etc. over the past 50 years have crushed GM, Ford, and Chrysler. This is exactly why Toyota and Nissan have built their plants far away from the UAW in places like Texas and Tennessee. The UAW could be working to support the Big 3 and inherently it's own existence, but they seem hell bent on getting every last drop out of the companies before they falter. Yet another example of a good thing taken to the extreme of entitlement and self-greed.
Politicians are rushing to patch the holes in the balloon because they want to be the saviour, and to restore the fairy tale. The investor is smarter than the Government, so they have controlled the market ever since the original hole. That is why commodities, namely oil and scarce metals, have exploded in value "overnight". The Fed is rushing to try to restart the credit market, but the investor isn't buying, and neither are people. Unfortunately the large swing in fuel costs stiffled the market, and soon the popularity of oil seemed to wain, causing it's own balloon market to pop.
Now the government in China is rushing to try to support the shrinking US market, the companies are hunting for ever expanding markets in an effort to quantify their own existance, the US government is hemmoragging dollars into the market via veiled bailouts through the upcoming Budget, and programs like Cash-For-Clunkers. All of this effort to try to revive a past due economy, and the international community isn't buying it, except China, whom is heavily reliant upon the US until it's own emerging market explodes and modernizes, which it is doing on a HUGE scale. The Iranians and OPEC are moving to protect themselves against the dollar's moody upswings and future vulnerability by switching the valuation of oil to a hybrid currency based upon several international currencies ranging from gold, the Euro, to Chinese Yuan.
What does the US need to do to improve our immediate future? We need to cut expenditure on a massive level. Americans need to consolidate and eliminate their debts. We need to whipe the slate clean, and work on rebuilding the foundation of the American consumer. The manufacturing and commercial sectors will respond to the consumer very quickly. It's as easy as rebuilding the consumer. We need to replace entitlement with work ethic, and greed with honesty. We've overextended the bounds of individualism and need to return to a nationalistic approach.
It sounds like a socialistic approach because in order for us to win we all need to support each other. Capitalism does not directly associate a single player scenario, capitalism is about capitalizing on opportunity, and opportunity is best achieved with a collective effort. That's why we don't have John Rambo in our military, we have a team of people that work together to achieve a common goal. Socialism is simply the gross exageration, and perversion, of that mentality.
Just my two cents.
Here is my ideology on the entire reason why the US economy is in the trash, and why it continues to be in the trash, and why it will not get any better for years to come. Pessimism? Yes, unfortunately.
You have to look at the root of the original causality of the boom : collapse sequence between the mid-90s and mid-00s.
The original correction came about following the Jimmy Carter era with the Reagan tax cuts. The reduction of taxation in a market economy is nearly always a positive move, both immediately and long term. We saw the growth of the American market along with the increase in globalization in both manufacturing and market spread. The consumer was happy to be back at work, and happy to have more in their pocket.
Then came the Bush Sr. era. We entered into a war, which is almost always positive for economic growth domestically due to the immense spending by the Government. Wars are a simple way to reinvest into the American market. Defense contractors, the military, and many other large employers fill their ranks, enjoy profits, and expand. It is in essence a bailout of the industry, especially following the cuts of the Cold War Era spending.
Following the Gulf War we came into the Clinton era, and the boom of the American market. Consumer happiness was ever increasing in the Clinton era. Fuel was cheaper than it was in the 80s, and it was steady. Market indications were golden, and it was a buyers market. It seemed like anything turned into gold as all of the indexes screamed higher and higher. Dellionaires, Microsoft Millionaires, and many other overnight successes. Henceforth the market would seem to entitle anyone a gain.
Move into the Bush Jr. era and the market grows and grows ever higher. Greenspan by this time has cut the rates to virtually free, presumably in a measure to slow the market's bull run. It backfires due to the banks figuring out a way to market debt shares to the hungry investors. Banks push loans on anything and anyone with a pulse, and house values respond in popular areas with alarming inflation. I say inflation because the market is virtual due to the "free" credit, there is nothing to substantiate the demand, as we would all find out later.
Fast forward to the trailing edge of the Bush Jr. era and we find the housing market is suddenly about to fail. The flags were there long before, but no one heeded them. Foreclosure, failed debt structure to the investors, banks left with no collateral, etc. all lead to the "Big Bank Bailout" in a measure to ensure cheap credit to the American consumer. The credit card industry, and many other credit based industries are soon to follow. Credit tightens and many markets are forced to shrink. Jobs across the country dry up as consumer spending and confidence both sink to low values. The market enters a bear run and suddenly it's political.
Meanwhile the "Walmart" effect is hammering American manufacturing, quality and investment wain further lowering American consumer faith, China rushes in to fill the gap and undercut many markets with easy to produce cheap goods. Complex American goods still are sharing an ever growing competitive market with the Japanese and Europeans which pushes more American manufacturing out of the country in an attempt to gain an edge. Ironically, Japanese and European manufacturers push their own manufacturing into the Southern United States in a ploy to increase their market share and gross profit margin.
Who's to blame for all of this?
The greedy consumer. In every single instance the consumer has a majority role in the market collapse. From the signing of the loan, to cheap goods at Walmart, to joining labor unions. American consumers entered an era of entitlement during the 90s that blossomed into a hugely inflated market in the 00s. The average American is drunk with materialism, greed based weath ideology, and entitlement complexes. Just look around you ... whenever someone complains about something being "too expensive" it's really a cry for "I want it to be cheap, because I want it", very rarely is it ever a real market miscalculation. Very few people want to pay for quality in this market, so manufacturers are all cut down to equal sizing ... allowing the emerging manufacturing sectors in India, China, Malaysia, Singapore, Taiwan, and Korea to swallow up the market.
Labor unions have twice pushed major markets into the international market. Most recently the UAW has muscled the Big 3 into their own epic financial crisis. They are simply a bunch of workers whom formed a mob in an attempt to force their will upon the company. While prior to labor laws in this country they were formulated for honest and honorable reasons, they have since been hijacked as a means of extorting their own greedy demands out of the companies. Pensions, over-market value salaries, extravagant benefit packages, etc. over the past 50 years have crushed GM, Ford, and Chrysler. This is exactly why Toyota and Nissan have built their plants far away from the UAW in places like Texas and Tennessee. The UAW could be working to support the Big 3 and inherently it's own existence, but they seem hell bent on getting every last drop out of the companies before they falter. Yet another example of a good thing taken to the extreme of entitlement and self-greed.
Politicians are rushing to patch the holes in the balloon because they want to be the saviour, and to restore the fairy tale. The investor is smarter than the Government, so they have controlled the market ever since the original hole. That is why commodities, namely oil and scarce metals, have exploded in value "overnight". The Fed is rushing to try to restart the credit market, but the investor isn't buying, and neither are people. Unfortunately the large swing in fuel costs stiffled the market, and soon the popularity of oil seemed to wain, causing it's own balloon market to pop.
Now the government in China is rushing to try to support the shrinking US market, the companies are hunting for ever expanding markets in an effort to quantify their own existance, the US government is hemmoragging dollars into the market via veiled bailouts through the upcoming Budget, and programs like Cash-For-Clunkers. All of this effort to try to revive a past due economy, and the international community isn't buying it, except China, whom is heavily reliant upon the US until it's own emerging market explodes and modernizes, which it is doing on a HUGE scale. The Iranians and OPEC are moving to protect themselves against the dollar's moody upswings and future vulnerability by switching the valuation of oil to a hybrid currency based upon several international currencies ranging from gold, the Euro, to Chinese Yuan.
What does the US need to do to improve our immediate future? We need to cut expenditure on a massive level. Americans need to consolidate and eliminate their debts. We need to whipe the slate clean, and work on rebuilding the foundation of the American consumer. The manufacturing and commercial sectors will respond to the consumer very quickly. It's as easy as rebuilding the consumer. We need to replace entitlement with work ethic, and greed with honesty. We've overextended the bounds of individualism and need to return to a nationalistic approach.
It sounds like a socialistic approach because in order for us to win we all need to support each other. Capitalism does not directly associate a single player scenario, capitalism is about capitalizing on opportunity, and opportunity is best achieved with a collective effort. That's why we don't have John Rambo in our military, we have a team of people that work together to achieve a common goal. Socialism is simply the gross exageration, and perversion, of that mentality.
Just my two cents.
