James Shapiro

The Economic Policies of Failure

As a lay person not schooled in economics but one who does understand the international business environment I believe that our current economic situation is the result of all governments trying to feed, clothe and house their citizens as well as possible. This is what keeps governments in power regardless whether they are democracies, dictatorships or socialistic. Protecting the country is what many like to say is the role of government but it is not what keeps the ruling governments in power with a few exceptions such as 2004 in the US. Every country wants to manufacture domestically in order to employ their people, repatriating profits without an investment in the country is ridiculous.

In the last decade the push for everyone to own their own home, the American dream, as the politicians like to call it has gone too far. As happens the pendulum always swings too far and that is what has happened with housing. The sub-prime mortgages increased the number of buyers which directly led to higher prices, more money for Wall St, and a continuation of the Republican administration trickle down economics. This might have worked for longer if not for greed and staidness by President Bush and Wall St.

Only actions as dumb as the Iraq war and the securitizing of the sub-prime mortgages could have caused the credit crunch and the economic crisis which is on track to get much, much worse.

If you don't like Keynesian economics what is the alternative? Do nothing and go to 25% unemployment rates as we had in the 1930s. Many of you may not remember the riots of the 1960s in our big cities. This can happen again if the government does not help the economy. The sit-in at the Chicago window factory was the first sign of people rebelling. Bank of America withdrew the company's credit line causing them to shut down on three days notice in violation of federal law and reasonableness. Interestingly BA took $17 billion of tax payer's money from the federal government a short time ago. Doesn't sound fair if you live on Main St.