Recently I heard a song by this title sung by Merle Haggard, and it seemingly described the feelings of a lot of folks right now. Don't worry, it was first published in the Spring of 1982 in the midst of the recession caused when Paul Volcker of the Federal Reserve cut off the credit spigot that had caused accelerating inflation from the late 1960's through the 1970's.
Lyndon Johnson's War on Poverty and the War in Viet Nam had been financed with credit, and very loose monetary policies were followed by Nixon, Ford and Carter, and the Fed chairmen that served under them. This created double digit inflation and extremely high interest rates by the end of Carter's term. He appointed Volcker to solve the problem. He did, but at the cost of a serious downturn.
At the end of the recession, the good times started back as a result of tax cuts and more deficit spending under Reagan, but this was again briefly halted by a real estate bust and the failure of most savings and loan institutions around the country.
Volcker was not reappointed, and Greenspan replaced him as chairman of the Fed.
The good times started back, to be only briefly interrupted by a tightening of money just in time during George H. W. Bush's term to cause a short recession in the election year of 1992, when Clinton was elected.
During Clinton's two terms, the good times returned, and the party, which was based upon very easy credit, lasted until 2007. Then, the world ran out of credit.
A slump has ensued that we are still not recovering from. So how about the good times? Are they really over for good?
I say "No." There are plenty of good times left. To get there, however, there must be some pain.
We as a country, and indeed the whole world, are at the end of a long term credit cycle. These have happened before, and, given human nature, surely will again.
What has happened? Chris Martenson put it this way:
"Banks began lending money at a faster rate than the global economy grew, and we're now at the turning point where we simply have run out of new borrowers for the ever-growing debt the system has become addicted to."
Now the bill is coming due. When one tries to create prosperity with easy credit, which the world has done, it will always end with a serious contraction.
Prosperity has to be earned, not borrowed. We have borrowed to obtain prosperity, and now, having danced to the tune, it is time to pay the Piper.
The economic paradigm we have operated under in the world since Bretton Woods in 1944, and particularly since Nixon closed the gold window in 1973, was based upon easy credit and fiat currencies, particularly the dollar.
In spite of huge efforts by governments and central banks around the world, led by the US, that old paradigm is failing, and cannot be saved. They are literally creating trillions of dollars and Euros out of thin air trying to do so, but it won't work in the end. But it will make the world's currencies, including the dollar, worthless if they continue. It may already have.
That reminds me of another country song, by Willie Nelson: "Turn Out the Lights, the Party's Over." All we have to do is recognize it, and move on.
Now, how about the good times? We have to get over the funk we are in. It will be painful, but we must go back to sound money. I am not expert on that, but we had pretty sound money before 1913, and since then the dollar has become worth only a penny of its value during that year.
Perhaps we will see whether after the Great Depression and the current ongoing crisis, our government and our people have the courage and determination to put in place a more sound and sensible economic paradigm.
If we do, the good times will come back.
Afterword:
For those who like country music, here ate the sites for the two songs:
http://www.youtube.com/watch?v=eFHJ41ktt3Q
http://www.youtube.com/watch?v=tsTAUs_h_uY
Showing posts with label Bush. Show all posts
Showing posts with label Bush. Show all posts
Sunday, June 10, 2012
Saturday, January 3, 2009
"The World Turned Upside Down"
That is the title of the song played by the English band as the troops under Lord Cornwallis marched out to lay down their arms outside Yorktown on October 19, 1781. Indeed, the world was upside down in English eyes that day. After over six years of bloody rebellion and very hard times for the people of America, victory was at hand, although it took another two years before the signing of the Treaty of Paris.
It was amazing how Americans undertook every hardship, risked their lives and fortunes, to throw off the yoke of repressive government and bring freedom and liberty to their country.
Of course, it was not a country, yet. It was not until eight years after Yorktown that a new Constitution was hammered out and adopted, creating the United States of America.
It was not easy to get there, of course. Then, like now, there were factions in the body politic, and they fought fiercely for their points of view.
One faction wanted a very strong central government, perhaps even a monarchy; another did not trust government at all, and wanted a very weak central government.
The result came down on the side of a central government that was strong enough to regulate commerce between the states and with foreigners, and to provide for national defense, but with very detailed limitations on the exercise of other powers. The real story is that the Constitution would not have been adopted without the first ten amendments that were added. All of those placed very specific restrictions upon the government, and reserved all those powers not specified in the Constitution to the states and to the People.
Through the years, disputes have continued, with some wanting to expand the powers of the central government far beyond the limitations of the Constitution, and others fighting to maintain appropriate limitations as provided by the Constitution. In spite of the tendencies of the courts to tinker with the limitations over the years, we still have had limited government to a large extent.
Until now.
Now we see the Treasury of the United States, in league with the Federal Reserve, engaged in distributing trillions of dollars to private institutions, mostly financial, without a shred of legal basis either in the Constitution or laws of the United States. Worse, they won't even tell the people or the Congress the specifics of how much and to whom.
George W. Bush, the lame duck President of the United States, who was elected supposedly supporting limited government, is now authorizing acts that go far beyond what is allowed by the Constitution. The Congress seems to be acquiescing, although it has certainly not passed any legislation permitting what they are doing.
It seems like the President and the Congress cannot just say "No" when the expenditure of large sums of money is concerned. Mr. Bush never has. The Congress gets its campaign funds with the ability to pass out taxpayers' money, so there is no hope there.
If one looks at where the money is going, one can immediately see that it is going to the big contributors to our politicians. Just check out the contributions by all those institutions to our politicians. Hundreds of millions of dollars have gone into political campaigns the last few years from those companies and their employees. Now we see what they have bought.
The most outrageous part of all of this bailout business is that the people who did everything wrong, who created this economic mess, who profited from it, who ought to be the big losers, are the ones getting all of this Federal money.
Who pays you might ask?
Everyone who did the right thing, that's who will pay.
"The World Turned Upside Down," indeed.
It was amazing how Americans undertook every hardship, risked their lives and fortunes, to throw off the yoke of repressive government and bring freedom and liberty to their country.
Of course, it was not a country, yet. It was not until eight years after Yorktown that a new Constitution was hammered out and adopted, creating the United States of America.
It was not easy to get there, of course. Then, like now, there were factions in the body politic, and they fought fiercely for their points of view.
One faction wanted a very strong central government, perhaps even a monarchy; another did not trust government at all, and wanted a very weak central government.
The result came down on the side of a central government that was strong enough to regulate commerce between the states and with foreigners, and to provide for national defense, but with very detailed limitations on the exercise of other powers. The real story is that the Constitution would not have been adopted without the first ten amendments that were added. All of those placed very specific restrictions upon the government, and reserved all those powers not specified in the Constitution to the states and to the People.
Through the years, disputes have continued, with some wanting to expand the powers of the central government far beyond the limitations of the Constitution, and others fighting to maintain appropriate limitations as provided by the Constitution. In spite of the tendencies of the courts to tinker with the limitations over the years, we still have had limited government to a large extent.
Until now.
Now we see the Treasury of the United States, in league with the Federal Reserve, engaged in distributing trillions of dollars to private institutions, mostly financial, without a shred of legal basis either in the Constitution or laws of the United States. Worse, they won't even tell the people or the Congress the specifics of how much and to whom.
George W. Bush, the lame duck President of the United States, who was elected supposedly supporting limited government, is now authorizing acts that go far beyond what is allowed by the Constitution. The Congress seems to be acquiescing, although it has certainly not passed any legislation permitting what they are doing.
It seems like the President and the Congress cannot just say "No" when the expenditure of large sums of money is concerned. Mr. Bush never has. The Congress gets its campaign funds with the ability to pass out taxpayers' money, so there is no hope there.
If one looks at where the money is going, one can immediately see that it is going to the big contributors to our politicians. Just check out the contributions by all those institutions to our politicians. Hundreds of millions of dollars have gone into political campaigns the last few years from those companies and their employees. Now we see what they have bought.
The most outrageous part of all of this bailout business is that the people who did everything wrong, who created this economic mess, who profited from it, who ought to be the big losers, are the ones getting all of this Federal money.
Who pays you might ask?
Everyone who did the right thing, that's who will pay.
"The World Turned Upside Down," indeed.
Thursday, May 15, 2008
You Just Can't Make This Up!
ABC reports the statements of President Bush before the Israeli Knesset:
"Some seem to believe we should negotiate with terrorists and radicals, as if some ingenious argument will persuade them they have been wrong all along," the President said to the country's legislative body, "We have heard this foolish delusion before. As Nazi tanks crossed into Poland in 1939, an American senator declared: 'Lord, if only I could have talked to Hitler, all of this might have been avoided.' We have an obligation to call this what it is –- the false comfort of appeasement, which has been repeatedly discredited by history."
This comes some two weeks or so after former (and worst ever) President Jimmy Carter met with Hamas, Iran's allies, and among Israel's worst enemies. One would think the reference is to Carter, who clearly has sold out to radical Muslim sinterests.
But no! Barack Obama, the candidate of "hope" and "change" thinks President Bush is talking about him! He complains that Bush is making statements abroad that are political. He is very critical of the President's statement.
Soon after, the Speaker from San Francisco steps in to criticize, then Joe Biden, then all the other Looney Tunes on the Democratic left.
Pretty soon, the City Councils of San Francisco and Berkeley will chime in with resolutions.
The President never mentioned anyone by name. Why would Obama think a criticism of appeasement would apply to him? Is that what he plans to do?
When I was a kid, we had a saying: "The guilty dog always barks first."
Karl Rove must have tricked him into this admission. Or maybe Obama and the Democrats are just real dumb.
Like the title says, "You just can't make this up!"
"Some seem to believe we should negotiate with terrorists and radicals, as if some ingenious argument will persuade them they have been wrong all along," the President said to the country's legislative body, "We have heard this foolish delusion before. As Nazi tanks crossed into Poland in 1939, an American senator declared: 'Lord, if only I could have talked to Hitler, all of this might have been avoided.' We have an obligation to call this what it is –- the false comfort of appeasement, which has been repeatedly discredited by history."
This comes some two weeks or so after former (and worst ever) President Jimmy Carter met with Hamas, Iran's allies, and among Israel's worst enemies. One would think the reference is to Carter, who clearly has sold out to radical Muslim sinterests.
But no! Barack Obama, the candidate of "hope" and "change" thinks President Bush is talking about him! He complains that Bush is making statements abroad that are political. He is very critical of the President's statement.
Soon after, the Speaker from San Francisco steps in to criticize, then Joe Biden, then all the other Looney Tunes on the Democratic left.
Pretty soon, the City Councils of San Francisco and Berkeley will chime in with resolutions.
The President never mentioned anyone by name. Why would Obama think a criticism of appeasement would apply to him? Is that what he plans to do?
When I was a kid, we had a saying: "The guilty dog always barks first."
Karl Rove must have tricked him into this admission. Or maybe Obama and the Democrats are just real dumb.
Like the title says, "You just can't make this up!"
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