Economic Apocalypse – Uncovering the Deficit of Understanding

Today a sensible conversation about the economy, sound economic principles absent in our time and lacking these the predictable inevitable stagnation, decline and collapse we are experiencing. This will be a discussion of reality denied, the ensuing systematic self-destruction of our national economic underpinnings, and of the remaining vitality mischaracterized as signifying economic health by those implementing the destructive policy.

We often hear conservative politicians speak of reducing regulation as one the key aspects of reinvigorating the national economy. While it is true that overregulation’s restriction and expense stifle growth as they drain off resources, in our time their most detrimental effects are the uncertainty they produce. The regulatory environment has become a never-ending series of deflections away from the ideas of profit and efficiency. (I have a friend who defines these types of self-serving self-gratifying systems as “self-licking ice cream cones.” They are regulation for the sake of regulation, and in the name of the “greater good” they do greater harm in unintended and ill-considered consequences. Their effect by intention or ignorance is to draw away the resources typically applies to growth and efficient production.)

Here is what Alexander Hamilton and James Madison said in Federalist 62 of this ever-changing regulatory environment: “Every new regulation concerning commerce or revenue, or in any way affecting the value of the different species of property, presents a new harvest to those who watch the change, and can trace its consequences; a harvest, reared not by themselves, but by the toils and cares of the great body of their fellow-citizens. This is a state of things in which it may be said with some truth that laws are made for the FEW, not for the MANY.”

Those seeking to put their fortune and futures at risk (the entrepreneur) in creating new businesses or expanding an existing one, understanding these basic truths of human nature, will be hesitant to the same proportion as is the uncertainty. None in their right mind will put their fortunes at risk when in the future, when they would expect to see a return on their investment, they are uncertain what rules and regulation will be in effect and therefore placing them in jeopardy. Again, here are Hamilton and Madison (Federalist 62) on this very matter: “In another point of view, great injury results from an unstable government. The want of confidence in the public councils damps every useful undertaking, the success and profit of which may depend on a continuance of existing arrangements. What prudent merchant will hazard his fortunes in any new branch of commerce when he knows not but that his plans may be rendered unlawful before they can be executed? What farmer or manufacturer will lay himself out for the encouragement given to any particular cultivation or establishment, when he can have no assurance that his preparatory labors and advances will not render him a victim to an inconstant government? In a word, no great improvement or laudable enterprise can go forward which requires the auspices of a steady system of national policy. ”

The paper ends in telling of government such as ours becoming without respect and not deserving of it. This is the result of the “change” we have been forced through by the lawless leadership we have and continue to endure. It destroys public confidence and disappoints “hope.” The closing paragraph where the effects of mutable (ever changing) policy are defined: “But the most deplorable effect of all is that diminution of attachment and reverence which steals into the hearts of the people, towards a political system which betrays so many marks of infirmity, and disappoints so many of their flattering hopes. No government, any more than an individual, will long be respected without being truly respectable; nor be truly respectable, without possessing a certain portion of order and stability.”

This takes us to the next aspect most often heard espoused by conservatives as necessary to increase and revive our economy – reducing taxes.

Our recent and current economic policy relies on economic principles called “Keynesian Economics.” This defines theories, developed by a man name Keynes, which say economic output is influenced (and now regulate) by the amount of cash available in the system. Our national policy has been to control (regulate) the amount of available cash in the US economy by controlling interest rates. (More money available by lower interest rates said to equal more growth – higher rates less money and less growth.) This is the reason why as interest reached and remain at zero the only means remaining to influence the amount of cash in the economy is to print more money to spur growth. (Realistically its result was to keep the dead appearing to have life. (Weekend at Bernie’s))

Rather than explaining this and its contribution to the longevity of the recession let’s rather look at the underlying premise of cash availability as it relates to growth. The contradiction is manifested when the “statists” reject it’s having the same effect when the cash is placed (left) in the hands of its rightful owner – those who produced it. The quickest way to stimulate an economy to is reduce the amount of cash the government takes from it. This is why tax cuts for those paying taxes are the purest form of economic stimulation.

The rejection of tax cuts is based on who has the cash. In the modern era the government decides who gets the increased cash and its motive is the power and control it gains by being the distributor (better defined as the gatherer by taxation and the redistributor). In the form of tax cuts the cash is left in the hand of those who will create and expand economic growth [on Main Street]. In the hand of government it’s given into the hands of its cronies (the largest financial institutions and Mega Corporation). We see the effect as capital pouring into the “Wall Street” bubble as cash creating nothing except more cash (closed system). The creation lacks foundation and when the storm comes it can only be washed away – as with all “bubbles.”

These are the basics at work in our economy. Reversing them are the beginnings of economic recovery. They are the difference between free markets untainted by central engineering, and Socialism (communism) masked in crony capitalism.

There are other great external forces at play against our economy and therefore against “We the people.” In our time the difference is they are a coinciding of interests against us from central governments foreign and domestic. Please suffer with me for a few more sentences as I briefly outline several of them.

(Before continuing I must say while Ted Cruz is my choice for president Donald Trump has a much greater understanding of the economic war that is being waged against us. And I mean “war.” I have no problem with either one becoming president. I think they should be the ticket.)

The first and most import aspect is the trade inequality between the US and the world. Trump seems to be the only one who sees the imbalance with China as predatory on the part of the Chinese. It involves currency manipulation with the intention of keeping their products just under our minimum wage level. In other words they make sure the cost to import their products remain below the level those same produces can be produced domestically due to our minimum wage.

Here we see the manipulation of wages by central governments (ours higher and theirs lower) having a common negative effect on our economy. Our government uses the fact that the products can only be cost effectively produced abroad as justification for allowing their (deregulated) imports, while in fact the reason is our own policy creating the elevated level of cost.

The next and most recent negative influence is the Saudi increased oil output designed to bankrupt US oil production. There is no response by our government because the Saudi and US Administrations have the common interest of destroying our domestic energy production. This also coincides with the Administration’s announcement in recent days that it was (by executive order) halting all new coal leases on federal lands. One can only wonder why at this time of economic decline we would be lessening and endangering our domestic energy capability and the economic activity it produces. We can speculate that the decrease in coal will drive up the need for oil while oil is in an artificially inexpensive abundance due to the Saudi increased output. This could simultaneously increase our dependence on oil while killing of domestic production (coal, gas and oil), and leave as its result an even greater dependence on foreign oil imports once these occur.

I will stop here and leave you with this one undeniable conclusion; we have a government that now acts in the interest of its friends, foreign and domestic, at the cost of who our Constitution demands it represent, We the people. “This is a state of things in which it may be said with some truth that laws are made for the FEW, not for the MANY.”

Paid for by TimD2016 – Tim D’Annunzio for Congress – www.timvote.com