Topic: Economics
Is America In A Recession ? The Current state of America's economyby Ben Samuel
(centrist)
Saturday, May 17, 2008
The Great Depression of the 1930's and World War II was a demarcation point where America converted from a mostly agrarian economy to an industrial economy. It was characterized by migration from rural America to its cities and inevitably the vast cosmopolitan areas, which housed its giant industrial complexes, factories and supporting services. America became a production machine, nearly a monopoly of supply to a world ravaged by the effects of the Second World War.
The hundred years prior, in the vast build up to that industrial titan, were marked by their cycles of Boom and Bust, Panic and Irrational Exuberance. More recently, we have taken to revising these terms to "bull markets" and "recessions." In all previous periods, no matter the cycle, America was a rich country with its greatest debts to itself, and the cyclical downturns having more to do with the consolidation of its wealth in the hands of individuals, the "robber barons" and the trusts who wished to see themselves invulnerable to the influences of government. These people labeled Franklin Roosevelt a "traitor to his class" for his New Deal policies and programs, among them Social Security, the National Labor Relations Act, Health Insurance and the Tennessee Valley Authority. It will always be a great debate as to the effects of these programs on the development of the great American middle class, but without them American entrepreneurs did not bring power and light to rural America, nor did they exercise any care to the use of America's resources, its land, coal, oil, and its people to name just a few. The distribution of the nation's wealth effectuated by the New Deal policies, we may reasonably agree, accelerated the development of the American middle class, and perhaps unrealistic expectations on the part of Americans concerning the ability to maintain standards of living to which so many had become accustomed.
Today we find ourselves in circumstances that are a departure from our past, for our nation's wealth is no longer in the hands of Americans, but in the hands of other countries a number of whom have more recently been our avowed enemies. In the never ending search for a means to profit, the nation's businesses have moved the greater part of their manufacturing capacity offshore to exploit the costs of labor, and lack of regulation afforded by developing countries. So much so, that the businesses of those countries have acquired the assets of a great many of those businesses that have sought such exploitation. Their people now are moving up the ladder of success, and because we have indebted ourselves to a great extent to maintain our standard of living, they are better equipped than we to compete for resources that are becoming scarce or otherwise difficult to supply.
In an effort to thwart our creditors' advantage, we have devalued our currency, to pay back at lesser value that which we owe. It is in many ways a game of chicken, but we find that as a nation, we seem to be hit by the car. The victims of course will be the American people of the current complexion, as their standard of living is now moving down at an accelerating pace. Having been encouraged to spend at the expense of their old habit of saving, they have come to rely on their homes as their savings account. But that savings account is now losing value faster than their currency.
America itself is an adaptive place, and provides a ready home for those who can afford it. The new entrepreneurs from the emerging countries are already, and will continue to, acquire the assets the current Americans must sell in order to keep going. It is a weeding out process. The complexion of America will change, and the values that come with that change will be different than those of us who were born here, and had some generations of family here, recognize and hold dear.
We are not in a "recession" for such a term is meaningless now. America is undergoing a paradigm of change. Whether it is good or bad is in the eyes of each beholder.
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article are those of Ben Samuel only and do not represent
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