Saturday, March 13, 2010

2007-2013 Greater Depression

Depression Family circa 1935

Now that the federal government is finally admitting to a recession around two and one-half years after it started, people are asking how long will they have to endure. It's a difficult question to answer because there are so many things that got us here. This is, without the spin, a depression that is worse than any since the 1929-1937 big one.

Certainly not until 2013 and perhaps even longer. Many things got us here and the Federal Government sending us money will not pull us out. Not until our leaders realize that global free trade isn't free, unless your trading partners are buying from you in equal amounts. Electronics? All off shore. Steel and most aluminum? Yep! Clothing? Ahuh! Food? Much if not most processed food comes from China. You know, the country that spiked baby food with poison? Automobiles? Well, what with the bancruptcies of our Auto industry and now the giant leap off a cliff that Toyota just made, still to settle out, but as long as Obama wants to help you pay for your car, home,etc.with funny money, I guess people will still want to buy $5000 cars for $35,000.

We have been running trade deficits that are abhorrent for many years. We have shipped our heavy industry off shore, so as to not have to face high wages and the Sierra Club. We have even shipped our light industry off shore, all in the name of cheaper prices. Well, it doesn't help much to have cheaper prices, if the purchasing public are home out of work and can't buy anything, cheap or not. We used to get along without Chinese or Japanese cheap stuff just fine. We charged tariffs against the poorly paid labor of third world countries. This is how you level the playing field amongst dissimilar economies. When and if those other economies lift themselves up to our standard of living then and only then would we have free reciprocal trade.

It isn't about business screwing the public, it was the removal of tariffs and unlimited free trade that sent our industry overseas. Government and Industry tend to be dance partners. Well meaning legislation can torpedo an economy, just as happened. We must turn the page back a ways and realize that we had an economy and jobs because we did not join the global economy. For everyone in the world to be economically equal, we would have to lower our standard of living to average out with those making $2.00 per day in Malaysian or Chinese sweat shops. We unionized many years ago to avoid that part. Sure, the unions became too powerful and had to be slapped down some. Still, a balance between unions dictating policy to boards of directors, and workers being dominated and taken advantage of is necessary.

We started by giving up the gold standard, then the silver standard, believing that the US dollar was a world standard and didn't need to be backed by anything other than confidence, and that is where it begins and ends. Confidence, is deduced by those that totally believe in a currency. But currencies are backed by productivity. We no longer produce much of anything. The service industry, that of each career field supporting any other, as in a circle jerk is a false sense of security. I don't recommend that we return to the gold standard, or even the silver standard. But we must produce enough gross national product to offset our imports.

I see a possibility of an actual deeper depression coming unless our government starts thinking of us rather than the entire globe. There are areas of this world we live in that have never transcended from tribal life that can't even form a workable government outside their own tribal sphere, let along how to produce farm stuffs food and more importantly, develop a manufacturing economy. Politically, a chicken in every pot and universal home ownership just isn't going to work, hasn't worked and never will work.

Our schools are taught by either people with an agenda or those without a clue as to how business, industry and labor co-exist and why. Prejudices are fed from one generation to another, reflecting not what is happening now, but the grudges from yesterday. Wake up, people!

The United States of America once had an attitude. It was one of we can do anything we think we can do. Somewhere along the line, we have forgotten or don't care about the sacrifices that our parents and grandparents suffered to give us. We are now a nation of spoiled brats that feel the world owes us a living, without the intellect to figure out how we got it to begin with. I am totally disgusted with how this generation is turning out, and the waste of our forefathers and mothers efforts.

Some will criticize this post as being inflamitory. Perhaps they would be right, but I like the old saying, "Hope for the best, but prepare for the worst."

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