The simplicity of our times is regrettably the complexity we seek to solve. While Democrats and Republicans barter for the soul of the American people little has been said about the real cause of this economic and moral chaos. You see it all comes down to “corporate greed” and “government corruption”. This simple complexity is then solved by incarcerating all our politicians. I concluded long ago that the finite life of any Democracy is latent Communism. It may appear that our politicians have thrust so much “fear” into our everyday lives that we have become numb to the concept of what a true democracy really means – the power of the people.
Now we have Obama. This unit of individual political will hopes to conquer the status quo and decades of unaccountable government decision-making and the lethargic pace of positive change. His hope is that a massive stimulus bill will rally the American people, and thus, create positive change. The boldness of this plan is shackled by the undercurrent of subjectivity and invisible rebuttals. The opposition, however, sees failure as an economic solution to recovery. While a plausible theory, it lacks credibility in the sense that the losers have already been pre-ordained. Obama’s great moral stance is that he does not wish to see any losers – just victims. Victims become the patients of this gradual change.
What everyone may be miscalculating is the repressed anger and frustration of the American people. America after all is probably the only Democratic Capitalist Republic that allows its citizens the “right to bear arms”. Macchiavelli and the Fathers of the American Constitution knew full well that there must exist, an exit for those who have been repressed. While some bear the Charter of Rights others will bear arms. It is not unrealistic to foreshadow a moment in time where pockets of Americans rebel in this fashion. The real dilemma will be in measuring the degree of this insurrection.
We seem to be talking about money all time. Not in thousands, millions or billions but now in trillions. When the scale and magnitude of those dollar values no longer becomes comprehensible then you have anarchy - because at that point, the dollar value has no intrinsic value. The notion that we will throw a lot of money at so money things and hope that something sticks defies the invention of Teflon. Perhaps but let’s look at the economic consequences of not creating real growth. Government spending ultimately impacts the size of the country’s debt and devalues its currency. Fortunately the American economy is still viewed as the primary global economic engine – but for how long?
What is the financial fallout of this current economy?
1. More lay-offs mean more government spending in idle activity and no tax recovery from those unemployed workers.
2. As unemployment benefits cease and jobs become harder to find, welfare will drain more American currency and grow the debt.
3. As individuals wallow in their uncertainty disease and homelessness may follow. Medicaid and Banking will sink deeper in debt and more strain is placed on the economy.
4. As more and more jobs are shipped overseas to strengthen the bottom lines of American based conglomerates and managed funds more jobs will be lost and fewer taxes paid.
5. As the thirst for consumer goods and services diminish corporations and governments will seek innovative ways of increasing their prices and taxes. Food and healthcare costs will probably be on the rise.
6. Daily staples like gasoline, natural gas, water, electricity and garbage collection will see increases and property taxes for those who have homes will have to subsidize the vacancies created by foreclosure. Bankrupt banks will pay their share of property taxes on foreclosed homes from government loans.
7. As manufacturing sectors like the North American automotive industry dies so will the entrepreneurial spirit that gave it birth. Banks are not lending any money in new technology and Obama’s plan, if enacted make take years to put in place.
Oddly, the biggest card held by Obama is seen in the least light. That card is diplomacy. America has played the guardian of global democracy to the benefit of many except the American people. Obama will probably call this hand and it will be very expensive for its American allies. How this hand is played will foretell the future fate of America and its positioning on the world stage. This is how American protectionism will be played out. Obama knows full well that China and Russia are formidable and healthy foes and if Darwin is right a new economic reality may be emerging.
Edgar Watson Howe wrote, “A good scare is worth more to a man than good advice.”
Thank you,
Joseph Pede
Joseph Pede
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