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Cowboys are free-spirited. Normally, they do not conform well to rules/regulations. Thus is the term "Cowboy Capitalism" is an appropriate label of the federal reserve's policy. It allows the free markets to determine equilibrium and/or balance of supply/demand in our economy. They do not want government intervention and/or regulations to restrict the markets and economy. Nobel Prize economist Milton Friedman wrote "Freedom to Choose" and "Power of Choice." I studied his theories and also John Keynes' "Keynesian Demand Theories" in college. Reaganomics started the "Trickle Down Theory" and/or "Supply Side Economics." He implemented Mr. Friedman's economic theories. Simply put, "Trickle Down" is to lower taxes, especially for the top, and those tax savings will "Trickle Down" from the top to be reinvested into new jobs and manufacturing to spur US economic growth (GDP). Past and current President Bush has continued this same economic theory.
What are you going to do with your economic stimulus check? Do you think we have inflation? They tell us the Consumer Price Index was 2 percent in 2007 and currently is 3.5 percent. Do you believe that? Your government wants you to spend your check! 67 percent of our economy (GDP) is from consumer spending, the highest level ever. It is voodoo economics.
What happens with a recession? Will consumers continue to spend? Job losses and unemployment year to date are increasing. Finally, Mr. Bernanke has admitted that we are in a recession. How will you stimulate jobs back to the US? Past manufacturing jobs are lost due to off-shoring. The Fed Funds rate is at 2.25 percent from 5.25 percent one year ago. When it goes to 0 percent, then what? When will you admit that "Cowboy Capitalism" is a failed economic policy?
Current economic facts solidify that opinion. Again, we are looking at another huge budget deficit. On January 28, the budget office projected a deficit for 2008 will be $219 billion before the cost for the Iraq/Afghanistan Wars, the $168 billion economic stimulus plan and now a recession with lower tax revenues! Thus the $10 + trillion national debt projected for 2008! Since 2000, the national debt will have increased $4.5 trillion an all-time record from all past presidents combined. The annual interest on that debt will be an astounding $468 billion. The $10 trillion national debt will be 69 percent of our gross domestic product (GDP) and is economically unsustainable. Can you please pay your $33,000 and for each of your family members? This is your share of the national debt.
Starting with Reagan, who initiated the concept of "Cowboy Capitalism" and the Bush presidents, our national debt will have increased over $8 trillion using their "supply-side , trickle-down theories." Our national debt at the end of 1979 was $960 billion. The US dollar has declined over 40% in that time. This means you have 40 percent less buying power, with much higher inflation to come.
Isn't the Federal Reserve a non-partisan, independent, government agency? Why have they endorsed "supply-side economics?" Explain to us why off-shoring US jobs and our manufacturing base is good long-term for America? With high foreign currencies versus the historic lowest US dollar, why is it okay for them to buy US real estate at a 50-70 percent discount? Is this good for America? Probably, since you support globalization. Are corporate monopolies influencing policy? Isn't JP Morgan/Chase the 2nd largest investment firm in the US? Why the $30 billion bail out of taxpayer's money for Bear Stearns for the benefit of JP Morgan/Chase? Corporations keep getting bigger. Why hasn't the government enforced the Sherman Antitrust laws? Where's the federal Attorney General? Should large hedge funds and derivatives (speculation) be allowed? Aren't they the reason for the mortgage and credit crisis that caused Bear Stearns failure, and large fluctuations in our financial markets?
"Cowboy Capitalism" has been a complete failure. The economic facts since 1980 solidify that statement. What's the answer? Simple, change the economic policies of the nation. Keynesian economics advocates government intervention as needed and demand side management of the economy. FDR utilized this during the depression and New Deal, as did the Clinton administration. Guess what it worked! Look at the economic facts during those eras versus the current and past eras of "Cowboy Capitalism." What did you find out? The irony is now the President, Fed, and US Treasury are now recommending new regulation of the financial markets! Maybe they have read the book entitled "One Trillion Dollar Meltdown." Are they nervous? They should be, as they put our country in a huge mess. It will now take generations to help get it rectified. But of course the top 10 percent who own 71 percent of all US wealth/assets yes, that's correct want to maintain this status quo of "Cowboy Capitalism." However, the bottom 90 percent who own just 29 percent want change. 81 percent of US voters feel the country is going in the wrong direction. We must be watchdogs of our democracy and constitution. Are you upset? You should be. Vote accordingly.
Douglas Hahn is a graduate of Nebraska Wesleyan University with a double major in economics and business. He lives in Central City. He is concerned with the fiscal direction of our country.
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