Monday, October 25, 2010


With the election getting close we are finally starting to see many articles on economics.  It is about time, from the questions about the tax cuts for the wealthy.  They have been in place for years, why haven't they worked? Questions about trickle down economics, again we've been waiting for the trickle down for years.  Questions about trade, I thought that free trade was a rising tide and would lift all boats?  Instead it is a reef that is going to sink all boats.  Questions about the disparity of wealth.  Questions about why the wealthy are not spending their money when most people are spending everything that they have plus some that they don't have.  Doug Muder discusses this  Robert Reich has a new book out and a fabulous interview with Stephen Colbert  Stephan of course has it figured out, at some point the little people will no longer be able to buy the products that support the upper class and at that point they might take more from him than the government ever will.

So, while we have all of these candidates for office talking tax cuts, run government like a business, we have a spending problem, ... they are missing the economic point that we have a demand problem.  People simply do not have the money to sustain this economy as they have always done through purchasing.  Most people over the last year have taken salary cuts (either directly of indirectly by trading benefits for salary).   Prices have not fallen at the same rate or at all, things are simply more expensive for people who were just hanging on before.  Some prices have gone up (health insurance) or consume a higher percentage of income (fuel).  The wealthy cannot sustain the economy, they are not going to create jobs with no customers, they cannot possibly consume enough to replace the purchases of 95% of the population, and they cannot give enough away to charity (giving is down) to replace government programs.

We either need to join the race to the bottom or find a way to protect the country through buy it and build it in the US.

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