Don’t Worry, We Know Better!

In one of my previous lives I was a turn around artist. I would go into either just before bankruptcy or just after bankruptcy and attempt to “save the savable”. On several occasions I helped long time friends. Once I got comfortable with the situation and saw how close they were to failing I would ask why they did not call me in earlier.

They would invariably respond, “I have seen what you have done with other companies. I knew you would cut the company and change it from what it was. I did not think our situation was that bad. I was sure we could turn it around with just a little more time.”

This morning current data indicated further deterioration of the US economy. Inflation is registering at a 12% annual run rate while consumer confidence is down. The FDIC announced that credit delinquencies in mortgages, car loans, credit cards and commercial paper are at the highest level in 30 years. The Vice Chairman of the FED came out and said that there is greater risk of recession than inflation. For some reason he sees the two as exclusive events.

The international markets interpreted this as the FED’s tendency to continue to lower FED funds rates. The dollar dropped to its lowest levels ($1.49 to buy 1 Euro). Oil increased to its highest level (over $100). Wheat, corn and all other commodities priced in dollars increased proportionately to the fall in the dollar.

This time it is different. Our economy has changed. Commodities are no longer the center of our production costs. We are the silicon tech economy where ideas are more important than physical goods.

This type of wishful thinking keeps us from taking the necessary steps to fix our economy and move forward for the future. Einstein’s theory is that mass cannot be created or destroyed. It can only change form. Energy is catalyst or the byproduct. Mass is the commodity. Our economy will be different when we change the source of energy at the base of transforming mass from one object to another. As long as Oil is our energy source it is the same old economy that Henry Ford took on.

If we continue hiding our heads in the sand hoping that our economy will fix itself things will only get worse.

The talking heads blame Ethanol for the rise in commodities. They blame the drop in the dollar on the European Union’s holding interest rates to fight inflation. They blame the loss of jobs on lazy workers. They blame the high cost of agricultural products on the Congress for not passing Amnesty legislation for slave labor.

At the same time our “compassionate” President says that he will veto the new bankruptcy legislation because courts should not tell business what to do. The Presidential candidates are just now realizing that “It’s the economy stupid.” For some reason they thought that people were more concerned about the war in Iraq instead of feeding their family.

Our leaders are hiding their heads in the sand. They refuse to accept that we need structural changes to eliminate the policies of Reaganomics. We need to eliminate our public debt and force financial institutions eliminate their unethical and immoral practices. We need to raise taxes and reduce our presence in the rest of the world. Remember we cannot take on the world’s problems if our own country collapses. We need to regulate business and eliminate illegal immigration. Most of all we need to return the United States government to the people of the United States removing all influences of business in governmental policy.