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Pastimes : Let's Talk About Our Feelings!!! -- Ignore unavailable to you. Want to Upgrade?

To: nihil who wrote (36948)	5/7/1999 6:58:00 AM
From: PiMac	Read Replies (1) \| Respond to of 108807

PMFJI, Nihil, but I value your opinion. Your explanation of basic foreign policy [33470] made a lot of sense, and was immediately followed by Kosovo, so I could see it's truth in action. I wrote the following to my local newspaper, in response to their editorial. It should be self-explanatory enough. I invite your comments. The editorial, "Don't pick the roses" has an analysis of the economy marked by the personalities of Presidents from Carter to Clinton. The genesis of the "current good times" is attributed to President Reagan, and fellow Conservative Republicans. Their means are new policies for government taxing and spending. The conclusion is to get government out of social insurance programs, like Social Security, before the good times are over. A less political analysis holds that there are only two, macroeconomic forces that created the current times. All other, fiscal or monetary policies fade to microeconomic fine tuning of the resultant economy. A strong macro economy can absorb much bad microeconomic governing. These two forces are the Consumer Economy and Stability. We are currently an economy with 75% of the activity serving consumers. The rest serves investors. The natural flow of money from business is to concentrate. Since the concentrating wealth can't be fully consumed, it is spent on investments, like factories. Since the wealth flow is greater than the wealth creation, the consumers become poorer. Less and less can buy the factory's products. This is Depression. Government is the mechanism to recycle some concentrated wealth back into the economy. It is a mechanism that taxes wealthy places for Government money and spends Government money on other places. Middle class Mutual Funds are only deferred consumption, not investments in this sense. This is the consumer economy first introduced by FDR, confirmed during and since WWII, and shown in practice by President Reagan. His specific tax cuts were against the consumer economy, but they, added to constant social programs and huge military spending, created deficit spending that took from the future, not the wealth of the time, so indirectly kept the consumer economy model. It also left unimagined debt that we still service. His economics were not unusual compared to Presidents since the Depression. His unique contribution to our economic times now is ending the Cold War. Business needs stability. Reaction times are long and the stakes are high. One is obviously war. War creates instability when our national interests at risk, not peripheral wars like Vietnam, Korea, Iraq [but not Kuwait] and other policing affairs. Instability also includes Natural Resource failure, like the Arab oil embargo, or the Dust Bowl of the 30s. The worst instability comes from internal Revolution, like the country put itself through to get out of non-essential Vietnam. It wasn't any defeat in Vietnam or any social spending that gave us in stagflation from Nixon to Bush, it was internal instability. The beginning of prosperity in the 50s had no destabilizing actions. The record prosperity of the 60s was unmarred by instability . Our present boom is due to our business climate returning to stablity after 25 years of healing and the Cold War ending. We are seeing the productive power of a Consumer Economy. This is the Real peace dividend to the economy, not fractional percentage points from the government budget. Complex theories are a distraction. Business simply creates amazingly when it has peace to do its business and customers who can buy. The bloom of this prosperity could come off for two reasons. Russia was never stabilized. It may have been too great a task, or we didn't have the will under Bush and Clinton. Or, less obviously, is the trend of diverting Government recycling from where the wealth is concentrated over onto middle class consumers. Inflation of 3%, not zero, is the sign of a sustainable growing economy. We have been rewarding our business leaders too much and for too long now. PS: If I begin to dry up and then disappear, it is because I have dried up and disappeared. Likely hurts me more than ya'll, anyway.