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A letter from a friend in COSTA RICA- Les Waggoner
What Happened To The U.S. Economy?
The second error was in not knowing economic history and the fact that the middle class, with money to spend, drives the American economy. In 1982 a policy of supply side economics was begun by adjusting the federal income tax rate in favor of the wealthy in the belief that if there was a sufficient supplies of product on the market it would be sold. Supply side economics holds that if the wealthy have more money to invest they will provide the funding needed to create new business ventures. This is a theory that has no validation in the history of the free market economy of America.
The third error was in repeating, beginning in 1981, the policy of laissez faire that was practiced from 1921 to 1932 and was one of a multitude of causes of the Great Depression. This policy led directly to the Savings & Loan failures of the late 1980's and early 1990's by allowing the industry to invest inappropriately in commercial properties.
Although the policies of the Clinton administration started to turn the economy around but fourth error was made in 1999 with the rescission of the Glass-Steagall act of 1933, which separated the banking and investment industries. Prior to Glass-Steagall banks were allowed to act as brokerage houses leading to the failure of many banks during the period from 1929 to 1932. With the passing of the Glass-Steagall Act the banking and investment industries were separated by law.
The fifth error was a return of laissez faire and supply side economics beginning in 2001.
The sixth error was in getting involved in military action while cutting taxes at the same time, not once but twice, in 2001 and 2003. This had never been done historically because the cost of war is inherently expensive.
Another error was made by the Federal Reserve in the allocation of Quantitative Easing One (QE1) in printing $2.7 trillion in new money and again Quantitative Easing 2 (QE2) in printing an additional $600 billion. The effect of printing this money with no value to back it was to devalue the dollar by 20%.
Let me help you guys out, especially those who are going through the tired act of blaming a political party, and/or "cons" or "libs".
The United states came out of WWII the only intact major industrialized power. We had our own way until somewhere around the mid 60s. There was simply no competition. But Europe, and maybe just importantly, Japan, were rebuilt. In fact, their infrastructure may have been rebuilt better than that of the U.S. By the 80s it was clear that India and China were getting their act together too.
There's only so much "stuff" to go around, and the ol' U.S.A. found it had to share. The pie and to be cut up with more pieces being cut and ever-enlarging helpings going elsewhere, even Mexico. It probably has never helped that the U.S. has harsher labor laws and more concern for the environment. Those things make it more expensive to do business, and cost is the name of the game.
It isn't so much that America is slipping downhill, it's that other nations are coming up the hill.
So there it is. Now you guys can continue on blaming Obama, Bush, liberals, or conservatives, as is the C-D way.
Let me help you guys out, especially those who are going through the tired act of blaming a political party, and/or "cons" or "libs".
The United states came out of WWII the only intact major industrialized power. We had our own way until somewhere around the mid 60s. There was simply no competition. But Europe, and maybe just importantly, Japan, were rebuilt. In fact, their infrastructure may have been rebuilt better than that of the U.S. By the 80s it was clear that India and China were getting their act together too.
There's only so much "stuff" to go around, and the ol' U.S.A. had to share. The pie and to be cut up with more pieces being cut and ever-enlarging helpings going elsewhere, even Mexico. It probably has never helped that the U.S. has harsher labor laws and more concern for the environment. Those things make it more expensive to do business, and cost is the name of the game.
It isn't so much that America is slipping downhill, it's that other nations are coming up the hill.
So there it is. Now you guys can continue on blaming Obama, Bush, liberals, or conservatives, as is the C-D way.
I'd say even more specifically, it's about wages. How is it cheaper to ship concentrated apple juice from China than make it here? Wages.
The only answer, to which both D's and R's balk at for various reasons, is import tariffs.
Anything else and the US becomes another 3rd world nation in a few more decades.
Phil Gramm is, no question, a complete jerk-off, but I'm not persuaded that this lets Greenspan, Rubin, Clinton, and Summers off the hook.
You leave out Frank, Pelosi and Reid?
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