THIS IS REALLY WHAT HAPPENED TO THE ECONOMY II

I wrote this post some time ago: just before the crash (10/07). It was and still is true. The reason that I am reposting it is that I am sick and tired of all the politicians telling us they are going to fix the problem. The only way the damage can be reversed is for import tariffs to be reinstated and even then it would take a long time to improve. No one is even suggesting this!!!

 

There is much talk about small business needing loans when what they need are customers. Who needs a loan to purchase stock when no one has a job and therefore can not buy what is stocked? We do not have a credit problem. We have an employment problem. Those who claim small business need credit either are ignorant of how a small business is supposed to work, or are just plain dishonest with their claim. Also who is going to loan money to someone who wants to buy a house when their income will not allow them to pay for it? Or a car?

 

The economy has become a gigantic game of Monopoly.  We are sitting on Park Place with no money and the game is over for us. That is how the game is won or lost. The one with the most money puts the squeeze on those who find themselves in a situation where they need what the other has: gas, food, shelter, etc. We have paid until we can no longer do so. Unlike the game we can not just get up, have a good laugh, and go on with our good life, but as those who have put the squeeze on us are finding out that they can’t either.

 

Politicians have gotten us into this. It is the responsibility of the government to protect the citizens of that government. It is not their responsibility to create jobs or any other scheme that someone can think of. The business of government is not business. If you have cancer, then do you need more cancer for a cure? If your government is that cancer do you really think it will cure you?

 

If all of the banks are either incompetent or immoral enough to loose so much money that they do not even know how much, then the logical remedy is to give them more money and of course do not demand any accounting for it, or even a contract demanding repayment. They will pay us back when they recover, but there is no contract to make them do so! From their record it is obvious they will not! I am a nobody, but even a nobody is not that stupid. A monkey has more sense than those in the government. Well, just to be fair to monkeys, they are not capable of immorality.

 

There is much talk about the middle class of this country. The middle class were the people that had manufacturing jobs that paid well. Look around, they are now either the lower class, or about to become so. They are history and only a figment of political imagination. And China hasn’t even begun to import automobiles yet. ARE THEY CRAZY?

 

 

 

THIS IS REALLY WHAT HAPPENED TO THE ECONOMY.

Go get a bullet to bite on because this is painful.

 

I am not a stock broker, politician, or any one else that has a reason to pull the wool over your eyes. I am just a poor slob that can see what happened and I am disgusted enough to tell it.

 

Let’s say the problem started with NAFTA (North American Foolish Trade Agreement), after all we have to start somewhere and I don’t have enough time to go all the way back to the Revolutionary War.

 

When those in the government passed NAFTA they assured foreign workers an advantage over Americans. They did this under the guise of free trade: that free trade was fair to all. However workers in South America do not have the same standard of living enjoyed in the US. So anything that is made in the US can be made cheaper in South America. I might add that OPEC is a monopoly and would not be legal in this country, so there is really no such thing as free trade.

 

Just after NAFTA was passed our exports to Mexico and South America increased dramatically: they were buying machine tools and equipment in order to build manufacturing plants. These facilities, when complete would manufacture goods cheaper than plants in the US. In other words they were only buying from us what they needed to take our jobs.

 

You have to ask yourself why your own government would pass such a bill; at least I have to ask myself. Was it complete incompetence? Or was it because those who were suppose to protect Americans, had investments in manufacturing business that could benefit from much lower labor costs. Whatever caused the government to pass the bill it is obvious that it was not in the interest of the people of the United States.

 

If that was not bad enough they gave China “Most favored Nation” status. China is a socialist government that is trying to become the largest super power in the world. China would like nothing more than to ruin our economy: and they have.

 

You see it is really very simple. There is nothing made that can not be made cheaper in China. So in passing just two bills our own government has totally destroyed the middle class of the US. If you work in any manufacturing job in the US and haven’t lost your job yet, you will; it is just a matter of time as anything made can be made cheaper in China. (I told you to bite a bullet, didn’t I?)

 

You want a laugh? We are supposed to compete with those who make a few dollars a day and yet manufactures in the US must pay minimum wages! The bottom line is, though we must compete, it is illegal!!! Well, it is a laugh, but a bitter one.

 

We are just beginning to see the result of what I would call a criminal act. The housing industry can not sell a house because no one can buy a house working at a fast food restaurant and those kinds of jobs are all that is left. Nor can the car manufactures sell cars, for the same reason. It should be apparent that interest rates mean nothing to someone who has no job. Who is going to loan money to someone with no job?

 

Is it any wonder the stock market is in turmoil? You don’t get something for nothing so the logical result of a stronger “world economy” is a weaker US economy.

 

My friends I don’t have a solution to the problem. Everyone keeps telling me that if I don’t like the government to vote, but we just get a new set of politicians and they do the same things the others did. This government is of the people, by the people, and for the people and “those people” would be the ones in charge, not poor slobs like me.

 

NOW THE REAL REASON THAT I REPOSTED THIS ARTICLE IS AS I WAS THINKING ABOUT THIS AS A GAME OF MONOPOLY I HAD A THOUGHT THAT CAUSED ME TO BURST OUT LAUGHING. THE WINNER OF THE GAME IS THE ONE WHO ENDS UP OWNING EVERYTHING.

 

HALLELUIAH – HALLELUIAH – HALLELUIAH – GOD WINS !!!!!!!

 

 

3 Responses to THIS IS REALLY WHAT HAPPENED TO THE ECONOMY II

  1. M. Patterson says:

    Our current crisis bears resemblance to the famous stock market crash that gave us the Great Depression. In both cases, people were using credit to buy something that was supposed to go up in value and thus pay itself off. Then, it was the purchase of stocks on margin. Now, it’s the purchase of homes with risky loans. In both cases, the optimism proved to be unfounded, and people were left with a debt that exceeded the value of the asset that got them the debt.

    Unemployment in our country is not all that bad, actually. Had there never been any loans to begin with, then home prices would be lower and we’d have the same number of homeowners, without the foreclosures.

    As far as exporting jobs to other countries, that is a problem, but it’s not a straightforward one. Your argument that it hurts our income as a nation is true, but while we are hurt by less income, we also benefit from cheaper goods. These things can be made in China and distributed from the United States with a net gain for our country, economically, but this is not necessarily the case.

  2. pill says:

    Very useful and interesting article , enormous thank you author

  3. astudent says:

    M. Patterson,

    You are right about the trigger that caused the crash, however there is a difference and that difference is the job problem.

    As far as unemployment is concerned, the calculations come from unemployment insurance figures. When someone is dropped from the roles they are considered employed. This is a poor way of accounting for unemployment even when times are good and a complete waste when times are bad. If one draws all of the benefits and still are unemployed they are considered employed by the system. (Times are bad now)

    Let me illustrate what I mean about exporting jobs to other countries.

    Suppose there are two companies in the same town that make widgets. Each business has about the same expenses. Let’s say the costs to both are about one dollar to make a widget and just for the sake of argument let’s say they sell them to the wholesaler for two dollars. The government passes NAFTA and one of the CEOs understands that if he moves his business to Mexico He will not have to pay American taxes, wages, social security, etc. He will not be fined by OSHA, which is a branch of the government that is judge and jury of any infraction they deem as such. He would face no union worries and no environmental pollution problems. Mexico wants the business there, unlike here, where the business is considered an asset to be required to pay what ever tax, fee, or penalty that can be levied against it. (Sound like I have been in business?)

    So the business is moved to Mexico where it is found they can make a widget for less than half of the cost in America. They decide to sell them in America for a dollar eighty five, so not only do they make a much better profit, they take business from the company that stayed in America.

    The CEO of the business that stayed realizes that he has two choices, either move his business to Mexico or close it before he goes bankrupt.

    All of the employees of both companies lose their jobs and all of the taxes, fees, and penalties generated from their employment and the business are no longer collected by the government. Because there are no import duties the government loses all income from both businesses. Pretty darn smart, huh!

    After all of the company employees lose their jobs the support jobs around the closed plant also suffer loss. The restaurants, stores, entertainment business, even the real-estate sales business are decimated. At first there are many houses for sale, but no buyers, because there are no jobs in the area. Only someone who is retired would buy a house in an area where there is no longer any hope for work. Even the retired, if they realize the support business are about to close will not buy. That is the major reason there are so many houses with no buyers on the market. Those who lost their jobs can not pay their loans and there are no buyers for the properties. Closing one plant could cause foreclosure on hundreds of properties, depending on the size of the plant.

    You don’t go out into the boondocks, build a fast food restaurant and expect manufacturing plants to spring up around it because it is there. However the opposite is true and when the plant closes so does the fast food restaurant.

    The companies and products may be fictitious, but the scenario is real and it has been occurring many times after NAFTA was passed. Business is just a game of Monopoly and one who is in business must take advantage whenever possible, because the competition will and you will find yourself bankrupt if you do not. (Dog eat dog)

    I really disagree with your last paragraph. It is true that we benefit from cheaper goods, but only temporally and then we are hurt by them and it is straightforward problem.

    I can buy a battery powered drill, made in China for less than $20 and the same drill made in the US would cost about 5 times more. But I don’t need 5 drills. I only need one drill and a job to use it on. Because the Chinese drills are so cheap the companies that used to make drills here are out of business and the people that were employees can not afford my services. So I have 5 drills and no job and it serves me right for not considering my fellow country men’s livelihood. Though I was able to buy for less, it cost my brothers their jobs.

    “O” wait a minuet. I didn’t ratify NAFTA this stupid, immoral government did and we paid them a salary while they were doing it!!!

    M. Patterson I like you. If you think you are right you say so and that is the way I believe it should be. This is an understanding of so called “free trade” that I have been preaching ever sense I realized how bad NAFTA was: and then there is China. All I can say is consider both sides of the argument and make up your own mind. Do not put a lot of faith in “the news”.

    If I am right you have to wonder how we can recover from this recession when we have no manufacturing jobs and no hope of establishing any, because without import duties eventually all manufacturing jobs in this country will be lost to those who can manufacture for less. That is the way free trade works.

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