Archive for March, 2008
For some time now I have been looking at the current economic crisis, much as everyone else. I mean it is a aspect that effects everyones life so how could we not look at what is going on. To me for some time I have considered what drives this country (capitalism) is also what creates a number of problems in this country. On the whole capitalism is not bad but it promotes a few qualities that most of us detest specifically greed, the need to covet and a general disregard for our fellow man. We constantly hear the words “Global Economy” and “Out Sourcing” but these words flow freely from massive corporations who have no national allegiance, therefore how can we expect corporations to have an allegiance to workers. One of the main problems with the economy of late is the recent bubbles, specifically the internet Bubble during the Clinton years and the more recent housing bubble. As anyone who knows a smidgen of how business works you can not sustain a trajectory of continuous growth and profit based on artificial numbers and fake stimulated growth.
The internet bubble to me differed from the housing bubble in a few simple ways. During the internet bubble the economy outside of the internet was doing well on it’s on. Secondly the government was not a part of furthering the internet bubble. Clinton for the most part did nothing to facilitate the growth or to sustain it. The current housing bubble to me was made worse by the actions of the government. The encouragement of lending to sub prime borrowers, the reduced rates, the lack of government oversight in corporate financial policy (can we all say Enron) and the general wish by the administration to see the economy appear to grow positively. All of these contributed to the crisis in the financial sector we now face. But here dont take it from me read this article here. A quick excerpt:
America’s economic contradictions are part of a new business cycle that has emerged since 1980. The business cycles of Presidents Ronald Reagan, George H.W. Bush, Bill Clinton, and George W. Bush share strong similarities and are different from pre-1980 cycles. The similarities are large trade deficits, manufacturing job loss, asset price inflation, rising debt-to-income ratios, and detachment of wages from productivity growth.