It’s The Economy, Stupid!
Today I thought I would try my hand at economics, but not without some hesitation. I subscribe to the rule that it is good to stay close to home on the big subjects about which I know pretty much nothing, at least formally. But as I see the inescapable consensus forming everywhere that our economy is teetering on the edge of breakdown, as a part of the whole I feel entitled to my say.
Besides, we are given two serious presidential aspirants: the Republican, whose life has been government, government, and government, makes no bones about knowing nothing about economics; and the Democrat, whose life has been activist, activist, activist, kind of like a Bono who can’t sing, is a lawyer. So not knowing anything about economics is clearly not a diriment impediment to throwing in two cents, as long as you can live with embarrassment. Come to think of it, now I think that I am beginning to see why politics and economics go hand in glove together.
As I understand it, our economy is melting down because of a crisis in the credit markets. Too many people are in over their heads for buying too much stuff with too little money to pay for it. One or two houses, one or two cars, a trip to the mall when you’re feeling blue, a 40, 50, 60 inch TV to catch the action on QVC should you be laid up in bed with the flu; this is the stuff that people wanted, this is the stuff they bought on time, and this is the stuff they haven’t time in their lives to pay for if they live to be a hundred. The reason is that the miracle of compound interest played backwards is a nightmare; a nightmare times 40 or 50 million, and I’ll leave that for somebody else to describe.
At any other time we would all be blaming The People and there would be tent meetings going on with preachers preaching about envy, gluttony, whatever and whoever. This is not any other time. This is an election year. You don’t blame The People in an election year. If you blame The People in an election year, the other guy gets elected. It is as simple as that.
But we do need to talk blame because otherwise we will not be able to find any pleasure in this crisis at all. Who else is there to blame? Fortunately for The People and the politicians, there are others. Even more fortunately, there are others who can be blamed with justice.
Take for example Uncle Sugar the strawman, his own august self. Finding himself equidistant between two giant mountains of guns and butter, over the years he has been choosing both very happily. Of course this means to pay for his gluttony he had to dip into the credit markets of China, Saudi Arabia, a few other such places, but our resourceful Uncle had a trick up his sleeve that has not been made available to the People at large, yet. Uncle deflated the dollar about 30 or 40%. Now those dollars if they are going to have any value have to come home where the People are bust and not buying stuff any longer.
The whole mess sounds almost like it was cooked up by New Jersey wise guys. If any group of thugs knew how to exploit weakness and make weakness keep on paying, it was New Jersey wise guys. They would give high interest credit to their losers so they could keep on losing. When the losers tapped out, the wise guys then took their businesses for a run through those credit lines. They would buy a couple of truckloads of stuff, send it out the back door, play until credit ran out, and everybody in the end busted out but the wise guys. The problem is that in the current situation I can’t figure out who are the wise guys. Everybody seems to be busting out.
I can’t say that I ever thought very highly of Bill Clinton when he was President. But he was a kind of Arkansas wise guy until recently when even he busted out. When he talked economics, he knew what he was talking about. It really is “The Economy, Stupid.” He never was emphasizing the second word. It was always about the third. Slick Willy understood The People back then.
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