Government by, for and of the Corporation

Americans, outside of the ivory towers, are aware that the US economy is in difficulty. There is no need to study the economic data, MM2 or MM3. They know things are bad because they are losing their jobs and having a hard time making it to the end of the month. Most Americans know that inflation is rampant since they have to heat their homes, drive their cars and buy food. Even the most supportive of President Bush are somewhat dismayed when they hear empty phrases like, “the economy is on a strong foundation” or “additional tax cuts for the rich are necessary.” In the real world things are bad and getting worse.

The Bobble Heads of Wall Street also know how bad things are. They can no longer talk about soft landing or Goldie Locks. Now they are looking for someone else to blame. They run around like chickens with their heads cut of ranting about how the FED “knows nothing”. They believe that America is contained inside the Island of Manhattan and that the only thing that is important is the salvation of Financial Institutions. They believe the hundred million dollar salaries of corrupt and incompetent management teams are more important than the jobs of the rest of America. They refuse to accept that Corporate America is the cause and not the victim.

These individuals are calling for an additional rate cut. They argue that this will increase spending by making more money available. They conveniently ignore the fact that the dollar has lost 50% of its value because of poor economic policy, American debt at historic levels, GDP based on smoke and mirrors service revenues, and forecasts for a much poorer America by international economist. They think that further augmenting the debt crisis by making even more money available will do something good. Rate cuts have proven, and will prove in the future, insignificant. World financial markets are more liquid than previous years and international investors will not buy the Polyannesque policies of the US.

For every 25 basis point drop in the interest rates the dollar will weaken proportionally. Oil in turn will cost more as producers realign the value paid for oil to represent real dollars and real buying power. Since the US does not produce more than 12% percent of the goods it consumes, inflation will directly reflect the falling dollar. Lowering interest rates will do nothing of value. Lowering interest rates will cause a brief increase in stock prices so financial institutions will liquidate their stock positions to unsuspecting Americans. Who cares that the losses will then be recorded in the 401K and IRAs of working America.

We have a few choices. The FED can, and most likely will, lower interest rates by at least 50 basis points. I say why so little. Drop the rates by 400 basis points. Even though dropping interest rates will have no real benefit on the US economy, this would at least quiet the monkeys.

Another, more responsible, road is to accept Reaganomics for what it is. Reaganomics is economic policy designed to redistribute income from the working class to the governing class. Once we accept that Reaganomics do not work, we can implement sound economic and trade policies that would return the US to a productive powerhouse. We can require that any country exporting to the United States be required to follow all laws and regulatory entities for the procurement of raw materials, materials, labor laws, indenture, design and energy production. We can inspect and clearly identify all products regarding origin and content (including genetically cloned meats and by products). Finally we can invest in the United States infrastructures and the United States citizens.

These two strategies are very different and they will take us to different places. I believe we should be fighting for our country and our children’s future. I believe that America can be great again. I believe that if we continue on this road to destruction as mapped by Reaganomics we will see poverty never known in the history of the US. All our big guns and smart bombs cannot save us for the decay of our economy and national infrastructures.

It is time that we invest in America. It is time that we return the United States to its citizens. It is time that America returns to be a Union by, for and of the PEOPLE.