posted on Mar, 21 2013 @ 08:59 AM
Before I get into the death of America as we have known it (at least those of us who have been around long enough to know the extent of the changes
during the last 40 years) I will tell a tale, a factual tale of the journey. The journey is one which is primarily economic in nature, but there are
undercurrents affecting this journey from deeper cultural origins.
We will start in the 60’s…The America of the 60s was one which was just beginning to mature, to shed its’ innocence during the era of JFK’s,
Martin Luther King’s and Bobbie Kennedy’s assassination. Our economy was so incredible…that to describe it as astounding would be an
understatement. One number is all that is needed…one statistic: We (America) produced 25% of the world’s manufactured goods. Today, we produce
around 5% or lower. The last number I saw related to this was 6% and that was quite a few years ago.
Families were comprised of a single wage-earner in most cases. The American prosperity was the stuff of legends in the 3rd world. I lived in Central
America for 5 years during this period and Americans, all Americans, were thought to be rich. After all…most of our roads were paved, our primary
mode of transportation was the automobile, and we had fast food!
Of course, nothing is perfect, and our country was undergoing rather difficult growth pains, what with the above assassinations, race riots, the war
on poverty (which, as we will see, worked backwards) and the “great enlightenment” (free love, drugs and peace).
The war on poverty was a noble cause, but as with most govt programs, the outcome left much to be desired. The war on poverty actually managed to
provide incentives to remain poor….more on that later.
During the 70s women began to enter the workforce…the official reasoning was the liberation of women…equality and all that jazz…the actual
reason was one of economic necessity. As inflation took hold, as the dollar became nothing more than a piece of paper, as the oil embargo and
resulting oil prices managed to severely affect our balance of trade women had to get jobs in order for the American family to maintain the standard
of living we expected…expectations that actually grew with time. Suddenly one car garages were too small.
Also during the 70s: the end of America’s “involvement” in Viet Nam (we lost..more later), Watergate and the increase in cynicism by the
citizenry. By the end of the 70s the “Great Malaise” was coming into it’s own.
Enter the 80’s…Inflation above 12%, unemployment above 12% and interest rates above 14%. Things were not good…Carter was President and was, in
my opinion, the worst of the latter part of the 20th century. He managed to take a bad situation and make it worse.
During the 80s, with inflation, interest rates and unemployment busting our chops, the 2 wage-earner family became the standard. We didn’t feel
really good about our country and the situation, but hey…no one really cared either. Gone was the energy and hope of the 60s.
Ronald Reagan enters the picture….Suddenly we were proud of our country again, the economy turns around somewhat. Unfortunately, Reagan’s
administration pursued an economic policy of a stronger dollar. This means: stuff made overseas is cheaper and our products made here cost more
overseas. Add that to what has now become a slightly negative trade balance and you have a recipe for future problems. Reagan fuels the economy by
cutting income taxes, and in particular investment income taxes….so now much more money is being invested in the economy. This really takes effect
early to mid 90s…and eventually results in …well, more on that later. In many ways, Reagan (in my opinion) was the best president of the latter
part of the 20th century. However the strong dollar will come back to haunt us.
Enter the 90’s..Bush the first, Clinton and debt. Once the 80s have past, one thing the average person would notice, if they were paying attention,
would be an increase in “debt” type of advertisements. Not hugely…but from virtually nothing in the 70s, to a small presence in the 80s to a
significant part of tv advertising in the 90s. During the 90s we experienced a false economy…everything felt great..business was good. However
there was a rotten core in our economy. Wall Street was driven by speculation, the economy was driven by a significant increase in personal debt all
while manufacturing jobs were flying overseas by the millions. But no one noticed…or rather, no one brought it up. In 1999 there was a rather dire
report presented to congress detailing exactly what was going on with personal debt, the increases since 1990 and it wasn’t sugar coated. In the
same report: Millions of manufacturing jobs moving overseas and..incidently also discussed was the huge increase in the negative trade balance that
occurred during the 90s.
This report drew zero publicity…zero action on the part of our politicians…zero outcry by our media….simply because things still “felt”
good. Unfortunately the economy of the 90s was driven, was fueled by increasing personal debt.
At least they did until around April before Bush’s election. This is when the # started hitting the fan. This is when the bubble began to burst.
Note that Clinton was still in office and the Republicans had not selected a candidate yet. The stock market began to … “feel” bad. The balloon
had reached it’s limit and popped. First the techies went, and then later the more traditional, sturdy, stronger stocks began to experience
Enter the 21st century…enter Bush…enter 911…
By this time, personal debt had reached a limit that was simply unsustainable. The economy hiccupped…we had a recession. People stopped borrowing
(generally speaking) because they couldn’t afford more debt so as a result less spending. Less spending = shrinking economy.
Suddenly (or so it seemed) there were fewer good paying jobs. Bush took the hit on jobs going overseas…never mind that they had been fleeing there
for a decade. The govt’s answer to that, Bush’s answer to that was to “help” the small business man (not much) and to make money easier and
cheaper to borrow…hence another round of increasing debt (now both personal and public), risky loans and a still increasing negative trade balance.
You would think that our politicians would be discussing the major actors here in real terms with honesty with real solutions.
No! Instead there seemed to be a silence around the 15 trillion dollars in negative trade balance over the previous 20 years (15 trillion dollars of
wealth that left the country, never to return). Silence about what to do to bring manufacturing jobs back (sorry…but taxing corporations that send
jobs overseas is just stupid on multiple levels). I do not have the answers, but I do know that any entity that spends more than it makes (see
Machiavelli) is doomed to eventual bankruptcy unless the trend is reversed. We desperately need to stop importing energy, and we desperately need to
increase exports. We desperately need to cut gov’t spending…Raising taxes is stupid…it is stupid to take money out of the private sector
specially during a period when the economy is as weak as it is.