Solutions for Economic and Political Change 3-13-2015
Last update 1.1.15
Solutions for Economic and Political Change
Since the early 1980’s the US and to a certain extent the Global arena have been under the influence of economic forces that have put a premium on growth over the risk involved in acquiring that growth. In essence Growth at any Price. If we have to name names as to who has promoted this view, one has to list the FED Chairman starting with Greenspan, then Bernanke, and now Yellen who is trying to keep the ball bouncing in spite of the fact that a lot of the air has been deflated from the ball.
The Solutions tried in Washington to handle the 2001 and 2008 crisis have lacked the determination to change to a healthier economic environment. The response to the first crisis was to have a war and offer variable rate mortgages to get more people to buy and build houses while the response to the second crisis was to offer cheap money to high net worth individuals and entities. The corporate takeover frenzy we are seeing today is just another manifestation of how to avoid doing the hard work of making structural and tax changes.
This leaves us where we are now; a time when outside of the big Global Corporations, more and more of the economic engine is fighting for survival. The culture of taking on risk and piling on leverage has been with us through all of this. The QE2 and QE Forever policies have made it look like this is the way, a walk in the park, something anyone can do.
The fact that the QE’s (after QE1 which was a rescue policy that had some legitimacy) have not worked to make a better life for the majority of Americans, or the World as next week’s ECB Conference will confirm, has pushed the FED to state that this could go on basically forever. Nothing is Forever, things that do not work eventually collapse. And that is where we are now.
What is the Solution? Washington as it has shown, will not take the big steps, so we are on our own.