Saturday, February 28, 2009

The Economy

Alright, this page has definitely been put on the backburner since the election. The fervor and political interest that Austin and I shared kinda went away and we weren't so excited anymore. Obama is now taking our freedoms as fast as possible and I think we've been trying to put our heads down and ignore it for a while.

But on the long drive home today, I was absolutely bored out of my mind and I turned on the radio. The only thing on worth listening to, was, and I hate to admit this, NPR; more specifically, the show This American Life. Now the whole station in general reeks of left wing propaganda. The reporters on NPR news can't find it in themselves to keep from injecting their liberal opinion in every story, interview question, etc. It's discusting. The saturday afternoon show This American Life is opinionated as well, the hosts are most likely gay, obviously are very liberal, and usually a little overdramatic or artsy for my taste. Sometimes the show is interesting though and today I was absolutely blown away. My eyes were opened. The subject: Explaining the banking crisis and the current economic situation.
The explanation was very simple, but covered all the bases, and opened my eyes to a few things. I don't know if you can listen to the show online or not, but if you can find it, its definitely worth a listen. I reccommend you try to find it and listen to it before reading on.

People have asked me recently what I think about the economy, the stimulus plan, etc. I usually tell them I honestly don't understand the situation and I don't want to comment. I believe in free markets and think every step should be taken to ensure them. But as to what needs to be done to fix this? I had no clue. I knew it was a very complicated situation, caused by banks and lenders and now supposedly we as taxpayers were supposed to foot the bill. My biggest question and observation was "how did the bad economy happen?" Not what triggered it, the loans not being able to get paid back and money getting tight, but why is all of the sudden money just not there? We still have people willing and able to work, and we still have stuff that needs to be done. So how is an abstract concept, money, getting in the way? And then theres all the talk about socialism, socializing banks, spending to prevent the gets confusing.
Well the show today straightened me out. First of all, I have to comment on all the socialism talk. Yes Obama is talking big about and throwing things in the stimulous package that take away our freedoms, redistribute wealth, and waste tons of money on ridiculous concepts like being green. On the other hand, the TAL show today gave a pretty convincing argument for the government to take over the banking system. Apparently it is historically THE way to solve banking problem. They mentioned that it might not even be possible in our current situation due to immense size, but that the obama administration and the government is doing everything it can to NOT nationalize the banks. Interesting....
Anyway, the main point that stuck out to me in the show, and made me realize they weren't just speaking for the Democratic party like NPR usually does, was when they said the entire economic stuation doesn't come from the housing crisis. It comes from the American lifestyle of DEBT. American debt is now 100% of the GDP. That means that our standard of living is nearly twice what it should be. We are living WAY above our means. And that explained to me why all of the sudden, even with supply of work and resources and demand for life to continue, the economy is coming to a breaking point.
This leads to what I personally think of what will happen or what should happen. From what I know now, I find it unlikely that any government intervention will help pull us out. I think we WILL crash, and in my opinion, the government should let it. It may not be an abrupt fall, we might just slowly drop into it, but we will reset. Standard of living is going to go down to what it should be. Drastically. People will be unable to accept that. Our system will probably not be able to cope with that. It NEEDS to happen. When it happens, life will be CRAZY.
But I believe its necessary. We will forget about global warmning, preconceived notions about coal, oil, and nuclear engergy, and other trivial issues and we will have to return to old fashioned ways of doing things. We will have to toughen up, learn to do things on our own, accept discomfort, and do what needs to be done. Life will be hard. But it could be something to look forward to. Returning to these values is what we've needed all along.
BUT, it also means tremendous opportunity for both Americans to cede our freedoms to the government and for the government to take our freedoms. The US under FDR, Germany under Hitler, and Russia under Lenin all lost huge amounts of liberty because the people were in a desperate situation. We cannot forget that, and we have to do everything possible to not let it happen again.

Gosh, I hope I'm wrong on all of this...