01-11-2021, 08:43 AM
The Obama years were economic hardship, but remember that those followed the worst economic downturn in 75 to 80 years. A speculative boom with rising inequality and underinvestment in plant and equipment ensures a financial panic (as in 1857, 1929, and 2008:
![[Image: saupload_four-bears.png]](https://static.seekingalpha.com/uploads/2011/10/10/saupload_four-bears.png)
There is no easy way out of the consequences of such a meltdown. Obama did what was necessary, backing the banks to prevent what made the 1929-1932 meltdown so destructive. The first year and a half from the 2007 peak looks remarkably similar to the first year and a half of the 1929-1932 meltdown. The difference was the bank runs that devoured savings that could have been used to back investment in plant and equipment and corporate bank balances that paid the accounts payable.
The American economy grew its way out of the economic meltdown in the 1930's and 2010's. Of course it was hard, and even if the political mood went sharply left in the first two years of the Obama administration, the political mood went sharply to the Right soon after that. The focus of the economy after 2010 was that any improvement in the economy would have the enrichment of economic elites as the first objective, and anything in the way of that would yield. The big difference between the 1930's and the 2010's was that the economic elites got rescued far earlier. In the 1930's they couldn't invest in the political process to achieve their ends. In the 2010's the economic elites had the funds with which to buy the political process, and that is how we got the Tea Party in Congress and its Presidential expression in Donald Trump.
![[Image: 5aa5bd2bb4b9a7039e4d5f0030f7a4d8.png]](https://www.advisorperspectives.com/images/content_image/data/5a/5aa5bd2bb4b9a7039e4d5f0030f7a4d8.png)
OK, much of the political distress that we have had reflects the personality of Donald Trump... which I could say of political distress in Venezuela. But note well: the economic growth that we have had is largely in higher share prices, higher corporate profits, higher compensation to business executives, higher medical costs, and (where the economy is at all vibrant) property rents. Ideally some of the economic boon for economic elites would trickle down, but that would require conspicuous consumption by economic elites -- castles and palaces, basically, with huge staffs of domestic servants. It's not appearing as 'plant and equipment'.
There is no easy way out of the consequences of such a meltdown. Obama did what was necessary, backing the banks to prevent what made the 1929-1932 meltdown so destructive. The first year and a half from the 2007 peak looks remarkably similar to the first year and a half of the 1929-1932 meltdown. The difference was the bank runs that devoured savings that could have been used to back investment in plant and equipment and corporate bank balances that paid the accounts payable.
The American economy grew its way out of the economic meltdown in the 1930's and 2010's. Of course it was hard, and even if the political mood went sharply left in the first two years of the Obama administration, the political mood went sharply to the Right soon after that. The focus of the economy after 2010 was that any improvement in the economy would have the enrichment of economic elites as the first objective, and anything in the way of that would yield. The big difference between the 1930's and the 2010's was that the economic elites got rescued far earlier. In the 1930's they couldn't invest in the political process to achieve their ends. In the 2010's the economic elites had the funds with which to buy the political process, and that is how we got the Tea Party in Congress and its Presidential expression in Donald Trump.
OK, much of the political distress that we have had reflects the personality of Donald Trump... which I could say of political distress in Venezuela. But note well: the economic growth that we have had is largely in higher share prices, higher corporate profits, higher compensation to business executives, higher medical costs, and (where the economy is at all vibrant) property rents. Ideally some of the economic boon for economic elites would trickle down, but that would require conspicuous consumption by economic elites -- castles and palaces, basically, with huge staffs of domestic servants. It's not appearing as 'plant and equipment'.
The ideal subject of totalitarian rule is not the convinced Nazi or the dedicated Communist but instead the people for whom the distinction between fact and fiction, true and false, no longer exists -- Hannah Arendt.