A History of the American Economy - Part 4

"There is only one basic human right, the right to do as you damn well please. And with it comes the only basic human duty, the duty to take the consequences." P. J. O'Rourke (the funny thing about this quote is that it is a favorite on "Right Wing" web sites... sounds awfully Libertarian to me.)

Continued from Part 3

During the last 25 years of the 19th Century the U.S. bumped in and out of Recession - despite seemingly endless bounties of Oil, timber, coal, fisheries... and population growth. The 8 years following the civil war so overinflated capital investment that over-capacity existed until nearly WWI - 35 years later!

(If there was ever a sillier reason for the outbreak of War than WWI I simply cannot determine it. I think one could very effectively argue that the War was fought because it could be fought, and the financial system desperately needed an inflationary event. It is often said that WWII was a "Just" War, and taken on its own that might be so... I would argue that there was only ONE World War with a 20 year armistice. Without WWI, the Nazi's likely do not exist, or at least do not come to power, and without conflict in Europe Japan likely does not risk attacking the U.S.)

The Federal Government's budget in 2010 is slightly more than 26% of GDP, and that means nothing to people voting today... but when you consider that up until WWII the Federal budget had averaged something like 3% of what was then called GNP you get an idea of just how much Government intrudes into our lives. (Did the U.S. have nearly 2% of the adult male population in prison in 1900? NAFC.) Was the U.S. out and about as the "World's Cop"? NAFC. Were you responsible for your own problems? You bet. Was beer, surfing, sex, camping, eating, etc... still fun? You bet. I would argue that what little benefit came to American's lifestyle as a result of this massive increase in Government spending came at a horrific price.

(I read in detached awe the writings of Heinberg and Kuntsler. For the most part these are some exceedingly bright fellows, but their noodle must get overcooked when they try to express rational thought about economics. Most of the American lifestyle that these guys rail against, and I am with them, was created by the politicians and regulators on THEIR SIDE OF THE FREAKING ISLE!!!! These guys HATE the auto, but it was the democratization of transport that destroyed the environment and created suburbia! They HATE corporations (BTW, so do I... but for an entirely DIFFERENT reason... the way I see it, the onset of the shareholder Corporation gave the Left the perfect tax collection point to go forth and increase the size of the Government relative to GDP (and increase Government's ability to f**k with us) nearly 10X in less than 75 years) but it was the UAW and Steel Workers Unions that were the template (AND the funding source for the Left during much of the 20th Century, without which there would BE NO Left) for the Public Employee Unions that are destroying the fiscal stability of the state, city, county and local governments. The same guys that can grasp ERoEI with NO technical background suddenly go deaf, dumb, and blind when somebody points out that since there is a FINITE amount of fossil fuels then there is a FINITE amount of carbon that can make its way into the atmosphere... Guys... Guys... you can't get a little bit pregnant... and I realize that you guys make a living at this and must continue to appeal to your goof ball fan base (of which I count myself as one)... but your economic arguments are just silly even if they have appeal to economically illiterate populating the protest-just-about-anything set.)

I want to skip around for a moment and pass through the 00's, teens, and roaring twenties (though I will be back), and point out that Samual Clemmons (Mark Twain" really knew what he was talking about when he said:

"What gets us into trouble is not what we don't know... it's what we know for sure that just ain't so".

The media reconstructs history for reasons that should appear obvious, yet many in the electorate believe them! Read this excellent argument as to why the argument that the U.S. Government's policies during the 1930's are NOT what made the Great Depression what it was.

and we will talk more...

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Oil imports into the U.S. at the half year mark have declined 5.8% over this time in 2009. We are 54 months into a oil import decline averaging just under .7% per month.

Price does NOT matter as much as VOLUME.

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There are NO COINCIDENCES. I have NO IDEA what U.S. intelligence agencies picked up from China, but this is serious stuff and bears watching. I have maintained many times on this Blog that you will know when China has come to the conclusion that their U.S. Bond paper will never be paid back: They will take Taiwan by force. Just because I am an anti-War/anti-Empire Libertarian DOES NOT mean I reject the idea that the U.S. must maintain a strong National Defense. Fighting really dumb wars for an extra decade of Oil imports that puts us in extreme danger because we are stretched so thin is an outrage. OUTRAGE. The world is still a ugly, mean spirited place.