Thursday, November 27, 2008

The U.S. Economy And It’s “Quack” Doctors

So let us say that you went to the doctor’s because you were tired lately. You had experience a fainting spell or two. He runs some test on you and says, “well we have found some blockage. That is stopping the blood from getting to your brain. But rather then clear the blockage, we are going to instead just infuse more blood into your system. We will do it just on the other side of the blockage. What I need you to do is eat more Bacon and trans fat laden food. We are hoping the pressure behind the blockage will get so great, that it will blow the blockage open.”

He would probably not even finish his suggestion before you were on the phone talking to your lawyer to get the malpractice suit in the works. However, this is exactly what our fearless leaders in Washington want us to do in order to solve the blockage problems with out economic system.

I have shown my illustration of the economic system on other post. If you haven’t seen it you can see it here. Circulation diagram. Basically it resembles any fluid controlled enclosed system. Picture a cars transmission system, the hydraulic lift, or your own circulatory system. Each one of these systems uses the fluids to achieve a desired result. The fluid is just a tool. Money is the fluid in the system. You don’t desire just build up a bunch of transmission fluid in your auto but rather the forward motion generated by it flowing through the drive train. You don’t desire money (really if a genie offered you a choice all the money in the world but you were stuck on a deserted island or being completely broke in NYC but everything you wished for you got, which would you choose?), but the things you can buy with it. Until policy makers start looking at money that way, the answers to our current crisis will remain illusive. Currently these "doctors" are just treating the itchy crotch with anesthetic powder.

The problem is that as 80% of our wealth has been pooled into the top 3% or so of our population, the governments answer to it has been to introduce this false wealth in the form of loans, stimulus, and reduced regulation. Since that blockage only seems to let a “trickle” back into the circuit once it reaches the pressurized side of the clot. More and more cash infusions have had to be put back into the system. The “blockage” occurs at the market places and housing developments around the country. It is most prevalent in the “big ticket”, durable goods. The amount of people able to afford these items with out going in debt is shrinking in number.

Let us face it. When somebody wants to buy a house, what do they think of first? How much money they have in the bank or what is their credit rating? Buying stuff in this way is kind of like having blood not getting the needed oxygen to your brain. The answer is not piling on more debt by using credit (infusing blood) and paying more then it is worth (increasing the blockage) and causing the next guy to do the same. That is going to result in an aneurism, heart attack, and probably irritable bowls. Or as the economist like to call it “bubble bursts”, “unemployment”, and “recession”.

None of the solutions to this problem will look very “American” on the surface. It will mean taking from the rich, giving to the poor, and setting up rules and regulations that reflect the economy as it does today and not as it did in 1776. At least that is how the conservatives will spin it. The truth is that the rich got that way by stepping on the backs of the poor and uneducated without actually paying them for the ride. It was easy since they were hungry, desperate, and not enlightened on the impact of their decisions. (imagine your 90 yr old grandmother talking to an Internet pyramid scammer.) Justice is also an American virtue. It is time for a check-up. We are not 16 anymore and we can not consume as if we were. We are in the midst of a full blown heart attack. If these quack medics can get us stabilized, a life alteration is in order. That is a big if.

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One last thought that came out while writing this that didn’t seem to fit exactly. So many Americans are so afraid of activities that get marketed as “un-American” that they will do some pretty derogatively foreign things just to keep up their self appearance. They are so afraid of being stabbed that they will throw themselves on the sword to avoid it. I might use this later, but it is here for now.

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