The road beside the Doghide and the Riverside Golf Course this afternoon
Failure of the economic system, Part II
|FTLComm - Tisdale - Wednesday, October 8, 2008|
I have found myself glued to the television since September 19 when I told you about the failure of the economic system. Jokingly, I asked my pharmacist for a mixture of Valium and Prozac to help me deal with my concerns about the stock market and he gave me some outstanding advice. "Turn off the TV for two weeks." Now you have to admit, that was exactly what I need to do, because no matter how concerned I am about the economic meltdown that is now world wide, there is absolutely nothing that I can do about it.
Well, that is the reality, but the impact the events of the world's economic situation are not something that we are utterly helpless victims of, with elections in both Canada and the United States right in the midst of the economic chaos. My duty, as a person who has spent a lot of time thinking about this issue is to pass on to you what my experience and education tell me that seems appropriate for me to share with you.
First off, I have to remind you that I am not an economist and everyone who knows me is well aware of my propensity to say much more than I should about just about everything, even when I know little about it. To review, I have a bachelor's in education with "social studies" as my major and a masters diploma in developmental psychology and counselling. Tog ether this educational background does not equip me to give anyone advise about money, but as to what to do in a crisis, ah well, that's something I have some practical and educational background. We, my fellow Canadians, are absolutely in the midst of a very serious crisis.
Please ignore the politicians who are attempting to preserve some calm in the economic world and tell us that "our economy is fundamentally strong" as true as that may, or may not be, we are over out knees in trouble right now and in short order,r that situation is going to have the Canadian economy up to its neck in the backwash of economic disorder. Prime Minister Harper is not, as far as I can tell, lying to Canadians when he says that he has a plan and that the best thing to do is patiently ride out the financial storm. I think he believes that, ideologically, it would be appropriate for he being a conservative to speak in such terms. We must talk about R. B. Bennett later.
Here are the facts that we need to know and understand if we are going to make any sense out of the next five years of economic discomfort and pain. The reason the United States dominates the world's financial stage is that it is a massive consumer. Consider this, the Japanese stock market fell almost 10% last night and their banking system is rock solid, but everything that Japanese produce is sold to Americans, that's why Toyota, the largest manufacturer of cars in the world, lost 11% of its value yesterday. Japan and its investors have realised that the United States is already deep in a recession and their market is all but gone and workers will have to be laid off. Volvo, Daimler Benz and BMW all announced layoffs today.
The American consumer economy is trapped in its system of credit cards and debt, debt that is climbing and with unemployment rising, they are going to be unable to purchase anything but clothes and food. Luxury items and anything not a necessity will be unsold and anyone who makes and services those items will be out of work.
The banks of Europe and Canada, like Australia yesterday have been attempting to help out and to add to the assurance business the British government has essentially nationalised its banking industry. Despite these measures and various announcements to lower already crazily low interest rates, the Dow opened this morning -200 points, at one point got up to +180 and closed almost -200 down. Everything that happens now is a patch on a patch and like Microsoft's Vista, certain to fail.
Every economic downturn, be it a recession, or depression, has its own specific causes, but ultimately the results are the same. Massive unemployment, people who don't work still have to live in an economy that will not be sustainable. The effects of the 1929 crash were still in effect when I was a kid in the fifties, similarly the effects of this and next week, will not be overcome in my lifetime.
So, what can we do to deal with such a catastrophe? We only have to look at what worked in the 1930s to realise that government intervention in the rebuilding of the economic structure is a certainty. Roosevelt's New Deal helped and MacKenzie King brought in similar measures in Canada but the governments that triggered the Great Depression in the US and in Canada were respectively, Republican and Conservative.
Here in Canada, R. B. Bennett maintained the course, steadily ignoring the calamity of the depression. Like Stephen Harper, there are many similarities between the two, well meaning gentlemen who's belief in the American Capitalistic system is and was unfailing. You have a chance in less than a week to elect another leader and party to lead Canada's government that will be more socially responsible and less economically dogmatic. It appears, the Americans have already decided that they will have their 2008 version of Roosevelt in an Afro-American Democrat, Barack Obama. We in Canada must do the same, or suffer the punishment of having a "stay the course" conservative government.
I just have extend the far to long rant but just a bit more is needed to explain something that needs to be confronted. The Communism of the Soviet Union collapsed upon itself and super conservative Ronald Reagan pointed out that American Capitalism had triumphed, it had won the struggle of the "cold war." It is so important to realise that as I pointed out in my last post on this matter, the American Capitalist system has itself now failed with the intervention of the government in the free market to the extent that is now taking place. Conservatives everywhere had better face the reality that their brash claims of a superior economic system has failed.
What does this mean to the world at large? There are only a few options in running an economy; feudalism, free market economy, socialism, communism, dictatorship, theocracy and technocracy. There may be others, but those are all present in some form, or another, throughout the world right now. The most highly successful nation state right now is both communistic and American Capitalistic at the same time and that is China.
The danger is that politicians advocate one of those systems as being the solution and in a practical, real world, none of them work, but a little of each, mixed into a humanistic responsible structure can produce excellent results. I am not for a moment suggesting that China is that model. China has the extremes and horrors that we all know are unacceptable, human rights, slave labour, sexual selection of offspring, even selling of human organs from condemned prisoners is not outside of what can happen in China. What we have to realise is that to succeed in a chaotic world, the principles of human dignity, preservation of life and commonly held civil liberties are first and foremost.
The American capitalistic economy has failed, its time to seek a newer world.