Letters to the Editor
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It sounds like most of your solutions are essentially inflationary
Which I guess sounds like a free instant fix to everything. But it's not.
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Robert:
Business has its own set of priorities which are NOT the same as those of a people, a country or an economy. Basically, business seeks to lower labor costs in order to compete with others in the same business...Falling wages is not good for any economy including ours however much WalMart may benefit.
At its most basic, a recession is a surplus of goods. That means that we haven't consumed what we've produced, so we have falling prices and falling wages. Three decades of stagnant wages will do that to an economy.
It depends on your world view. I'm a globalist, so when you say "we" and "any economy" to me that includes the whole world. For this reason I am definitely pro "free trade" because I think that economists and game theorists have shown that theoretically it will help enrich the whole world. To me the major problem is that "free trade" mostly consists of foreign companies going into a country, paying a pittance, bribing the local governments and then taking all the profits. That's not trade, that's economic imperialism.
When I think of free trade I about localized businesses being encouraged to grow and produce/sell their products on equal footing and develop a regional economy. [I don't even think that each locale needs to be American style capitalist.] Right now, the foreign countries are as dependent on debt as we are because they are just making luxuries for us.
The problem is that by having a globalized economy, we are talking about having aggregate supply/demand and productivity. The industrialized nations were at a lot higher level, so it just makes sense that they should have deflation as the global economy picks up. And deflation wouldn't be a problem at all if we weren't in so much debt.
To me the worst part about us going through deflation (looking over the very long term) is that we'll default on loans, which will cause the emerging economies to collapse. If it weren't for that (and if we had policies to help our own people have a basic standard of living) then even the US gov't defaulting could be a net positive in the long run, just because I don't see how we can grow ourselves out of debt at this point (yeah yeah, our warmongering, but still, a cut of $350 billion a year would be amazing).
I can't remember who said it, but one of the new capitalist humanist types was talking about how the industrialized world needs to actively get involved in giving our technology and building up the industries (in a semi-ecological way) of developing countries immediately. Then when we start to falter, their productivity won't collapse.
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irresponsible??
So much babbling on about the 'irresponsibility' of the Fed, the government, Wall Street..... As far as I can see, these entities have acted entirely responsibly if one looks at who runs them and the interests they serve. Corporate profits overall have exploded, management has captured an ever increasing share of earnings, the wealthy have seen their share of 'the pie' multiply, capital can move unrestricted, power has been concentrated, all the while structuring has been engineered to protect the assets and power of those at the very top while stripping it from all others. From the top I suspect things have been, and still are, looking pretty good. Where did the idea that the rich and powerful should act 'responsibly' toward the poor and weak come from? We've discarded any notion of morality and adopted 'the market' as a global human religion, and by its dictates everything, and especially those below one in the economic hierarchy, are simply resources to be exploited.
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@makoweb, a couple of things...
Your write:
"I am very frustrated that our politicians are so focused on keeping our debt-based economy afloat instead of discussing how to react to its (inevitable) downfall and transition."
*Well yes. They don't want a day of reckoning because they might end up having to give up some of their ill-gotten gains.
"Right now there are so many "needs" that are really luxuries, and if/when there is massive unemployment, we'll find that the only real (material) needs are food, housing, clothing and health care. There is a real danger that the demand for these things won't drop much because of misguided policies and therefore put millions of Americans in mere survival mode."
*Don't look now,but the costs of these real material needs, with the possible exception of food, have outpaced inflation for decades. And the only reason food doesn't appear to cost more than it does, is because we've hidden some of the costs in the tax code in the form of farm subsidies. And food costs are up - waaaaaay up, in the last year. And millions of Americans have been in survival mode for a very long time.
"...workers/companies in other countries aren't reaping the rewards in a way to grow the foundation of their own economies and become eventual equals)."
*And they're not reaping them here - that's the whole point. Revolution, anyone?
"So yes, I think taxes on the rich should be raised, but right now there is a false notion amongst many on both sides that it is only to have wealth redistribution. I think it would be far better if the increased taxes were used to work on infrastructure, research and expanding basic programs like food stamps and unemployment benefits that are necessary for a basic standard of living -- as opposed to cutting middle class taxes or giving out more to home owners for instance."
*Social policy - the decision to provide medicare or social security or a 40-hour work week or a minimum wage job - these ARE redistributive. And the reason that Bush and these rich economists do not want to put your prescription to work - "increased taxes were used to work on infrastructure, research and expanding basic programs like food stamps and unemployment benefits that are necessary for a basic standard of living" is because they would do just that. Improve the lot of most Americans.
Follow the money, here people.