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Old 01-07-2002, 11:38 PM   #1
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Politics and Economics

I'm completely lost in the last G.W. thread, so I will start fresh here, since, mostly, this thread is different than what that one has turned into.

1) What's interesting, firstly, is that if one knocks Bush, there is an automatic assumption that one loved Clinton. I will admit that I have defended Clinton in the past, but what I cannot deny is that he wasn't the most lackluster president, in my opinion.

Clinton, upon election in 1993, was already on too high of hopes. The people were tired of 12 years of Reaganomics and were interested in something new. Clinton, in the eyes of the left-wing, was to be something of a savior. However, that was a position he should never have been put in. I will repeat it again, but, like him or hate him, he was not a true liberal. His business policies were very Republican in practice--highly deregulatory. Hence, it really is no surprise that the largest mergers in history occurred under Clinton, when he had every power to stop some of them. This was something I verily disliked about him.

Clinton was more liberal in regards to social and environmental practices, but, obviously, this was something the Republican Party disagreed with, and, in 1995, when the Republican Party retook control of Congress, that ended all chances of a liberal agenda. What occurred next? Stalling measures: flag burning amendments, Whitewater investigations, impeachment hearings, etc. We have some here accusing the Democrats in the Senate today of being obstructionist. I would disagree with that, simply in that the Democratic Senate is pushing their agenda, or, at least, attempting to force the White House to compromise. The Republican Senate, under Clinton, was obstructionist in that they buried all agenda under piles of "moral outrages," hearings, etc., clamoring for ways to make Clinton's presidency a failure.

A successful presidency is dependent on both the president and Congress. I am not going to say that Clinton wasn't blameless in all this, because he wasn't. He was a very apt politician, and knew how to manipulate the public like the best of them. But to make this one-sided and blame it all on Clinton is sheer partisanship. Clinton, to me, was a president with promise that didn't totally meet up to expectations; but, considering how high they were in 1993, it was bound to happen.

2) G.W.--to be fair on him, he inherited centuries worth of problems that came to another apex on September 11th. To blame him or Clinton specifically for the rise of Osama bin Laden is ludicrous. Abject poverty in these regions have been a problem for a very long time. Combine that with ineffectual governments abd the rise of religious fanatics taking over their role in social welfare and education, you have a problem. You simply do not bite the hand that feeds you, and, in the case of these militants, the "hand" was religious institutions, not the government like in the Western world.

However, like Clinton's Republican Congress who used scandal as a diversion against legislating, I fear that G.W. is using the war as a diversion. Conservatism prefers laissez-faire capitalism, so "doing nothing" is preferable.

Now, however, we have Bush's "economic stimulus" packages. How kind, right? Tax breaks do nothing to stimulate the economy. Our economy is based simply on stockholder confidence, nothing more and nothing less. The economy of the 1990s was nothing real, but, as long as people kept funneling money into stocks, we believed it to be afloat. That's what the media told us, right? So we believed it.

Throwing money at corporations is not going to stimulate the economy. Throwing tax breaks at individuals or the working class even isn't going to stimulate the economy. You can tax 20% of $0 and you're still going to get zero; likewise, if you lower the tax to 10% of $0, you are still going to get zero.

G.W.'s mentality, obviously, is under the idea of trickle-down economics, whereas lavishing corporations with money means that they will lavish you with some of it too. But that won't happen, due to, once again, the legal definition of inflation. Once the economy picks up and people start getting paid again, the little bell that says "inflation" starts and interest rates are raised. Meanwhile, prices and credit continue unabated. Trickle-down economics may work well to placate the media and get the economy going for a little while, but it is a shoddy foundation. Innovation and, dare I say it, wages is what brings long-term prosperity.

3) Recessions. People like to pass around the blame for this recession onto Clinton. Onto G.W. I don't blame either, personally. Government, under the deregulatory climate, does not influence whether business succeeds or fails nowadays. The prosperity of the 1990s was due to the rise of computers and the internet, in my opinion, but, by the late 1990s, it was a false economy: dot-com speculation, fueled by the rise of 401K plans being infused into the stock market periodically. What has caused our recession is simple:

a) Reality set in, and people no longer had confidence in dot-coms, which had proven no profit, nor any future profit.

b) Business' reluctance to innovate. American business became complacent, thinking only of immediate profit and not of potential future profit. They aren't utilizing research into new technology. "New technology," computers and the internet, was what fueled the 1990s. Now it isn't so new anymore.

c) Low wages and high personal debt. Let's face it: our economy is driven by consumer spending. But who's spending is the most influential? The blue-collar working class. In the last two decades, their wages have been getting smaller when adjusted for inflation, and there is now more reliance on credit cards. While G.W. encouraged people to spend more in a "patriotic duty," people simply don't have the money, especially when most job cuts have been in the blue-collar sector and many are likely afraid of their own job being cut. Thus, they are saving.

The only thing that can solve this is the redefine inflation once again, as, during the wane of Clinton's term, when a published report declared wages to be higher, Greenspan raised interest rates. Hence, under the current inflationary structure, what is encouraged is low wages, whereas consumer prices, the former indicator of inflation (as was under Carter and before, but changed under Reagan), can now go unchecked.

4) My long-term economic prediction? In the next two decades, the European Union will continue to grow and will eventually overtake the U.S. as the strongest economy in the world. What is on their side is that they are unafraid of technological innovation and their technology is not proprietary (i.e., it is standardized), their approach to economic growth does not mean a loss of ethics in the process (unlike the U.S.), and they are united in their disgust for American economic supremacy. What will be at America's downfall is business complacency (which is what killed the American video game industry in the early 1980s), a short-term outlook regarding profits, and corporate arrogance.

Any thoughts?

Melon

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Old 01-07-2002, 11:42 PM   #2
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I liked being able to exchange dollar-for-dollar in the Bahamas, especially since the liquor was cheap.
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Old 01-08-2002, 01:22 AM   #3
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Can't add too much to that really, except to say: some very valid points, and;

Thank God this isn't another thread about George W, or I would have to throw my computer out the window. Honestly, nobody's about to change their mind at this point.

Only thing I would disagree on is the distinction between US and European practices. Seems a bit of a straw man to me. ie. what evidence is there that European corporate practices en mass are based on a stronger ethical foundation (ie. any ethical foundation) than those of the US?

One thing though, the world is fucking dangerous enough as it is. The sooner the US ceases to be the only 'big fish' in the pond, the better. It's not healthy, irrespective of if it were the US, the (old) USSR, Europe or China for that matter.

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Old 01-08-2002, 09:22 AM   #4
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Quote:
Originally posted by Kieran McConville:


Thank God this isn't another thread about George W, or I would have to throw my computer out the window. Honestly, nobody's about to change their mind at this point.


haha.. I was contemplating cracking the screen, spreading the pieces of glass with mayonnaise and Shoving them up my Old Middle School Director's Ass..


Hahaha... At least I crack myself up
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Old 01-09-2002, 04:27 AM   #5
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Quote:
Originally posted by U2Bama:
I liked being able to exchange dollar-for-dollar in the Bahamas, especially since the liquor was cheap.
That's the "spirit"!

Melon, I found yours to be a good and balanced post. But Achtung Bubba will probably come along and prove me wrong in a minute.

--- Out of respect for U2Bama, this post contains no smilies ---
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Old 01-15-2002, 05:38 PM   #6
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Quote:
Originally posted by melon:
4) My long-term economic prediction? In the next two decades, the European Union will continue to grow and will eventually overtake the U.S. as the strongest economy in the world. What is on their side is that they are unafraid of technological innovation and their technology is not proprietary (i.e., it is standardized), their approach to economic growth does not mean a loss of ethics in the process (unlike the U.S.), and they are united in their disgust for American economic supremacy.

I would beg to differ on your economic prediction, Melon. It is true that Europe is united in their disgust for American economic supremacy, however, no amount of disgust will compensate for the possible folly of the Euro. The actual economics behind the Euro are pretty controversial, in particular refernce to what has been called 'harmonising the economic levels', which is pretty difficult to do. No matter the fixed currency and no matter the fixed exchange rate, no amount of economic dogma is going to change the fact that Spain, for instance, is not as economically advanced as Germany, that Greece has a higher inflation and unemployment rate than Britain. These problems have yet to be answered and put into practice.

Besides the actual idea of the Euro, the way it has been implemented is not satisfactory and way too risky. Instead of gently entering the hot waters, they have dived in without any regard for the disruption of the economies within; they keep forgetting that Europe is NOT a country and it does NOT work on a single economy, they all have different economies with different economic targets and features. Simply because Europe exits, it doesn't mean that Spain is as richer as Germany - it isn't, its dead poor compared to it. Germany and France are the ones who most stand to benefit with the Euro, thats why Britain is so scared of entering; Britain's obstinacy in not joining the Euro will cost everybody a piece of the economic interest. The problem that exists here is unemployment and its link with inflation, Britain entering the Euro would be better for everybody concerned, however, I don't really see it entering it because the British by a vast majority are completely against progress and for the conservation of the pound; bloody stupid in my opinion, however, the British are what they are.

What is more than likely to happen is that Japan will fall and will need time to recover, Europe will have internal economic problems and perhaps see the Euro grow stronger gradually, though Britain's lack of cooperation will slow things down even more and complicate matters further, while the American economy will recover the quickest. Why? Because you yourself have pointed out that America's economy is driven by the phenomenom of consumption, sooner or later your economy will recuperate because it is not a long-term problem. It is not inflation or mass unemployment that is wearing your economy thin at the moment, the potential threat of Europe and Japan suffering from such is certainly more the case. I think that everyone has problems, but that America will recuperate first, and remain economically superior unless those organising the Euro get their act together first.

Ant.
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Old 01-16-2002, 12:43 PM   #7
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Oops...In rereading my passage, I forgot to mention that the success of Europe, in my opinion, will depend on the success of the Euro; and, personally, I think it will be successful in the long run.

I tihnk that it is probably smart of the British to hold back against introducing the Euro for now. The pound is one of the world's most stable currencies and the Euro still needs time to prove itself. Regardless of the value of the Euro, most of the nations that did plunge into it had currencies that were far weaker than the U.S. dollar, and the Euro is approximately 88 U.S. cents. Obviously, that is not the case with the U.K., so their reservations are warranted.

What I think has hurt the Euro so far is the fact that it wasn't a tangible currency until a couple weeks ago. And I'm sure that the dollar's success will be the euro's detriment, but, as long as we have Dubya in office, we can't maintain it forever.

Well, in regards to America's recession, what will recuperate it is the fact that we are an economy heavily dependent on credit. Hence, even though the proverbial John Doe may have a relatively low paying job compared to 20 years ago, when adjusted for inflation, all he needs to be able to do is afford minimum payments, which is what we've been able to do so far. Under the former inflationary indicators, which were determined mostly on consumer prices (high prices=high inflation), we would be considered in high inflation. However, under the Reagan administration, it was changed to labor wages (high wages=high inflation). Hence, we have an economy heavily dependent on credit, a system that encourages suppressed wages for the working class, and consumer prices that virtually go unchecked in a market that is increasingly oligopolistic.

My point is that it may buffer against severe recessions when one is looking at the short-term, but it is hard to sustain true, long-term growth until one can curtail consumer prices and encourage higher labor wages.

Melon

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Old 01-18-2002, 05:48 PM   #8
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Quote:
Originally posted by melon:
Oops...In rereading my passage, I forgot to mention that the success of Europe, in my opinion, will depend on the success of the Euro; and, personally, I think it will be successful in the long run.
I'm intrigued, Melon, on what basis do you form such an opinion? What has given you reason to believe that the Euro will be succesful?

Ant.

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