Demand Side Economics
68A Democratic Economy
The economic thought of the past centered on the supply side (money) as a basis for regulating the economy and controlling economic growth. This allowed an expansion of the money supply that manipulated the true value of money. We as Americans believed in a free enterprise economy. An economy that allowed all rise to the level of their abilities. Hard work, ingenuity, and risk, were the cornerstones. Supply and demand were the rules of the game. Money was designed as a basis to trade unlike items and smooth the wheels of commerce. We need to look at the history that is the basis of current economic thought to better understand the problems in today's economy.
The stock market collapse of 1929 and subsequent bank failures led to the great depression. John Maynard Keynes formulated his famous theorem based on interest rate adjustments and increased government spending. The economy slowly was rebuilt. Then WWII came along and we finally saw true economic recovery. The fight for freedom helped the post WWII generation develop an honor code and a true understanding of the value of freedom. Since Keynes Theorem seemed to work it was taught as a model for prosperity. The society in those times relied greatly on manual labor and mechanical production. Transportation was a slow and costly process. Americans had little competition from foreign markets whose industrial base was decimated by war.
Today we have a whole new world . People are deemed successful based on their bank accounts and monetary wealth. Mass media and marketing creates desire for flash and bling bling. The more notorious scoundrels are rewarded with tours of the talk shows promoting their lucrative book deals. Money is pooled in large mega-money funds, Markets move money at the speed of light. The origins of investors are often hidden in the maze of corporations and off shore accounts. Transportation is fast and jobs can be moved throughout the world. The interest adjustments that were such a part of Keynes theory have lost their ability to control. Foreign nations have amassed huge amounts of cash and have great production capabilities. Free enterprise and the laws of supply and demand are tilted by the supply of worthless money. Our economic recovery focuses on propping up an overinflated supply of money that never really existed anywhere accept on paper. The mathematical probability that the recovery will work is ZERO.
The gap dividing the masses and the rich grow wider and wider. The Demand Class consisting of all families with incomes of less than $75,000 will continue to find it more difficult to provide the basic needs for their families. These families are the ones whose spending meets or exceeds their earnings. This group consist of 75% of the population. Number of U.S. Senators and House of Representatives in this class 0%.
The Supply Class which earns in excess of $250,000 per year is less than 2% of the population. Number of U.S. Senators and House of Representatives in this class 99+%. Number of national syndicated talk show host and National T.V. announcers in this class 99+%. Is this the democracy that our country was founded on? What greater discrimination is there?
Is it any wonder that our news is slanted to blame the problems on the Demand Class or that our laws are designed to protect the top 2% at the expense of the bottom 75%
In America today we hear grand speeches about freedom and Democracy. Speeches about how our welfare system is ruining society. We hear very little talk in support of the working poor. We hear all kinds of justification for multi -million dollar bonuses. "Free Enterprise" says the talking heads of radio and T.V.! The problem is the unions driving up prices! From the Left we hear talks of compassion for the poor, disabled, and fatherless children. The left designs programs to protect our poor?. Think about it! A poor uneducated "welfare mom" gets government subsidized housing, medical care, and food stamps. The rich own the housing, make money on the food, and the medical complex enrich their-selves through tricking the medicare system. The welfare mom and children are ostracized by society as villains and have little hope of advancing. This breeds a society of troubled uneducated youth whose criminal activity bulges our tax role and overloads our judicial system. Who are the politicians and pundits on the LEFT and RIGHT really protecting?
Instead of looking at all Americans as human being with abilities and rights we look at our poor as a burden to be tolerated. If an American is willing to work 40 hours a week doing honest labor should not they be able to afford adequate housing? Should they not be able to provide adequate medical care for their family without going bankrupt? Should a working American not be able to live a honest life and feel that they can have an adequate retirement? Should an American child feel that if they work hard and study that they should be able to obtain an education equal to their abilities? Should our young college graduates be strapped with an enormous debt burden they will carry for years and years? Is there not enough need for housing, transportation, food, clothing, adequate affordable energy, care for the elderly, desire for recreation, and relaxation to provide an honest wage job to every American? Is there not enough resources and idle factory capacity to fulfill these needs?
We have the best politicians that money can buy! How come they cannot provide the protection from the loan shark charge card companies, bloated medical complex, and overpriced advanced education system? How come they cannot provide adequate systems to fulfill our demands? Are not all our systems really designed to protect the Supply Side (MONEY)?
Only when we switch our economic system to look at the worth of ALL Americans and we switch our political system to one that focuses on the demand side of supply and demand then we will have true and sustainable ECONOMIC FREEDOM!!!
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TC says:
9 months ago
I like the post. Great summary of hhat's wrong with our financial system!