The Fairy Tale

Discussion in 'Politics' started by Texas1911, Oct 6, 2009.

  1. Texas1911

    Texas1911 TGT Addict

    May 29, 2017
    Austin, TX
    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.

  2. SIG_Fiend

    SIG_Fiend Administrator TGT Supporter Admin

    Feb 21, 2008
    Austin, TX
    For a good overview of the problems with our economical, monetary, and fiscal policies, this is one of the better videos I've come across to summarize it all:

    YouTube - Peter Schiff Mortgage Bankers Speech Nov/13/06

    It's an hour long but, I highly recommend everyone watch it as things will make a lot more sense afterwords. The problems are fundamental and actually very simple. It's as simple as this. American economy = the Hindenburg. Our inflationary/stimulus spending "solution" basically equates to throwing gasoline on the burning Hindenburg and occasionally fanning the flames thinking it is going to put it out. Ultimately it can ONLY come down in flames because we keep pouring gasoline (inflation, meaning increase in currency) on the fire and occasionally fanning the flames. It's not a matter of if, it is a matter of when. Temporarily, inflation can push the effects back a bit farther into the future, but ultimately it means the crash is going to be that much worse as inflation further devalues our currency. It is the snake eating it's own tail.

    You know, the statistics of a government actually making all the wrong moves and failing this many times in a row without faltering......honestly you can really only see that happen so much before you have to ask yourself that, as irrational and obvious as all of these unrealistic policies have been, can this really all just be an accident or rather is it more likely that it is actually orchestrated for some sinister future purpose. People just can't get sh*t this wrong this much of the time without accidentally getting something right ever so often.
  3. Texas1911

    Texas1911 TGT Addict

    May 29, 2017
    Austin, TX
    Government spending is actually a proven system, even with inflationary spending. The problem with today is that we've already played the card, and played it, and played it.

    We've accrued so much debt that the nation is on the fast track to bankruptcy. The government thinks it can spend it's way out of the hole, but it's only doing that because of they are saving their own jobs. If you keep cramming dollars into the fire the steam ship will keep moving. It's just that no one wants to turn the wheel from steaming it into the cliff ahead.

    I just realized that my statement is ironic ... Schiff means ship in German.
  4. SiscoKid

    SiscoKid Active Member

    Jun 28, 2009
    A good, thorough explanation by T1911. I concur except for some additional theories.

    This quoted part happened but just what CAUSED it to happen in the short run? This is my explanation as I made it on some other boards, only one guy supported my theory.

    With the successes of Bush in 04 and 05, the left wing media became rabid. They attacked him and those sex-crazed Repugs on ever turn, constantly saying the house and senate would go democrat, so it did. When Peelosi and Reid took over in January 07, they had a goal.

    First it was to try and lose the Iraq War and blame it on Bush. They spent all their time with endless votes for a pullout (give-up) date. In the meantime, the price of a gallon of gas started inching up. When it got seriously high, there were calls for more drilling, but democrats would have none of that. As it approached $5.00, the average construction worker had to pay $75 to fill up, and he needed his truck to haul tools. Soon something had to give, something had to be eliminated.

    He took his family to eat out less, fewer trips to Walmart, less highway trips to see Grandma, fewer motel stays, less eating at McD's. Then came the bashing of those evil SUV's and F350's. But the dealerships were full of them. Recall how they started having sale after sale but couldn't give them away. The automakers retooled as fast as they could to make compact cars and truck. But really no one wanted them en masse, who could afford the down payment?

    The average Joe had to make a decision, buy gas, feed the family, buy a Six-Pak, or pay the mortgage? They got behind on the home loan, and the rest as they say is history.

    IF the economy had not tanked in the Summer of 08, McCain/Palin still might have won. But because it was "Bush's Fault", McCain had no chance, especially with Obama harping on it with every word.

    Democrats caused the problem originally, they capitalized on it, now it's out of hand and it sure won't be corrected with more democrat tax and spend methods.

    I have seen Donald Trump on Greta and he said the same thing, high oil prices. But he blames it on OPEC. He says that a barrel of oil shouldn't be over $25, which would make a gallon of gas about $1.00. How fast would the economy boom if that happened? How many REAL cars and trucks would be sold?

    It's all too simple for me to see.
  5. DCortez

    DCortez TGT Addict

    Jan 28, 2009
    Houston, Cy-Fair
    I'll add another fairy tale. Dems want the economy and our currency to do better so you won't depend on government for anything and we won't have to become an equal part (weaken ourselves to their standards) of the global community.
  6. MadMo44Mag

    MadMo44Mag TGT Addict

    Jan 23, 2009
    Very enlightening Alan and well stated.
    Simply put though; we Americans must learn NOT to live beyond our means.
  7. Texas1911

    Texas1911 TGT Addict

    May 29, 2017
    Austin, TX
    The only thing the Democrats have to blame for the mess is getting the media to lower consumer confidence with the constant "The Sky is Falling" stories we all heard until Obama took office.

    However, the root of the problem was not caused by the Democrats. It is being caused by our own social atmosphere. People want to blame the Democrats, but it's really not just their doing. Are they to blame in part? Yes. They were not part of the solution by ANY means.

    The Republicans had every opportunity to try and fix the situation as well, and didn't. That's why they got voted out, and that's why they'll be voted right back in in 2010. Probably to the same result.

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