HEY KIDS, IT'S A DEPRESSION
By Alan Caruba
A recession occurs when a nation’s living standards drop and prices increase. This downturn in economic activity is widely defined as a decline in a country’s gross domestic product for at least two quarters.
A depression is defined as an economic condition caused by a massive decrease in business activity, falling prices, reduced purchasing power, excess of supply over demand, and rising unemployment.
If this isn’t the beginning of a depression, it sure feels like one. Just check the daily headlines. On Monday, January 26, 2009, the Financial Times informed readers that “Gloom deepens, as 75,000 global jobs go.” Among the companies laying off people were Caterpillar, General Motors, Sprint Nextel, Home Depot, Pfizer, and Texas Instruments. My guess is that General Motors declares bankruptcy by March, 2009.
The Financial Times still called it a recession, but we know what it is, don’t we? And, if we just look at the 1930s and see how every move the administration of Franklin Delano Roosevelt made only deepened and prolonged the Great Depression, we will also see what should be done, but won’t be done. Indeed, with every passing day, the Obama administration looks and sounds just like FDR’s.
As to the stimulus bill, here’s what Monday’s Wall Street Journal had to say about it:
"According to Congressional Budget Office estimates, a mere $26 billion of the House stimulus bill's $355 billion in new spending would actually be spent in the current fiscal year, and just $110 billion would be spent by the end of 2010. This is highly embarrassing, given that Congress's justification for passing this bill so urgently is to help the economy right now, if not sooner.”
Much, if not most, of the proposed $825 billion “recovery act” will go to various government agencies. Even a cursory review of the 600-plus page document suggests that not much of its billions will create private sector jobs. Those portions devoted to infrastructure projects are not only worthy, but polls indicate are greatly favored by the public. By contrast, the bill includes nutty energy stuff about solar and wind farms, neither of which can produce enough steady, dependable energy to keep the lights on anywhere.
Contrary to the madness that has gripped most of Congress, government spending should be cut. There is enormous waste in government at every level, except the local level that must answer to people directly.
There should be major cuts in the tax rates from the wealthy to the lowest paid job holders. Putting money back in the hands of people will shorten the duration of the depression by stimulating purchasing, investment, and the risks involved in beginning or expanding a business of any size.
There should be a marked reduction in government regulation of all manner of business and industry in order to avoid increasing the cost of production and facilitate research and innovation.
NONE of these options -- proven, known, and effective -- are being discussed by the Obama administration, which, in office less than two weeks, is issuing executive orders that will increase the cost of manufacturing cars in the name of fighting “global warming” or “climate change.”
Apparently, word has not reached the White House that it just snowed in a Middle Eastern desert nation, the United Arab Emirates, for the first time ever! The White House hasn't gotten the message that the world outside (and including) Washington, D.C., is experiencing some serious cold weather.
It’s so cold in the District of Columbia that Al Gore’s Wednesday testimony to the Senate Foreign Relations Committee that the Earth is warming will likely be rescheduled.
While there is talk of tax cuts, it remains just that, talk.
Meanwhile, things are going to Hell in a hand-basket. So, maybe it would be a good idea to (1) pay attention to the history and lessons of the Great Depression, (2) avoid repeating the same mistakes, and (3) not take your eye off the ball here at home with talk of achieving peace in the Middle East, a region where peace has not existed since the days of Harry S. Truman and, for that matter, those of all previous Presidents.
The folks in Washington, D.C., being politicians, are all delusional, and guess who’s going to pay the price for that? Phone, fax, email your Senators and Representative, and tell them to put the Recovery Act back on the shelf.
The Earth's Natural History, Global Climate Changes,
& the Future of Human Life & Civilization on the Planet:
Science, Ideology, & Public Policy
Political Environmentalism Versus Human Progress & Prosperity:
Policy Issues Relating to Energy, Environment,
& Natural Resources
Alan Caruba is a veteran business, science and political writer, a Public Relations Counselor, and Founder of the National Anxiety Center, a clearinghouse for information about media-driven scare campaigns. Caruba writes a weekly commentary, "Warning Signs," posted on the Internet website of the National Anxiety Center, which is located at www.anxietycenter.com.
Caruba has a daily blog at http://factsnotfantasy.blogspot.com.
Caruba’s most recent book, Right Answers: Separating Fact from Fantasy, has been published by Merril Press. Books previously authored by Caruba include A Pocket Guide to Militant Islam, The United Nations Versus the United States: The UN's Plan to Control Planet Earth, and America: A Nation Without Borders -- A Pocket Guide to Immigration Issues.
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