Gap Between Rich and Poor Rooted in Government Policy

Anyone who proclaims the American economy is recovering from the financial crisis of 2008 is either lying or not paying attention.  The good people at the Economic Collapse Blog have aggregated 37 statistics that strongly indicate the economy continues to worsen under the financial leadership of President Obama and Federal Reserve chairman Ben Bernanke.  In particular, the figures indicate that it is the lower economic classes which have been most severely devastated by four years of reckless federal spending, bailouts for the well-connected, and artificially low interest rates.

For instance, since 2008 15 million more Americans rely on food stamps.  According to the Census Bureau, 146 million of us, nearly half of the U.S. population, are poor or low-income.  The Civilian Employment/Population ratio, which is the broadest measure of employment in the country, is the lowest it has been since the early 1980s.  Median household income has retreated to its 1995 level.  Lastly, the economy is not producing jobs for U.S. college graduates as 53 percent of them under the age of 25 are either unemployed or underemployed.  Given that many graduated with huge college debt, what could the future hold for these folks?

But, don’t despair.  Some in our society are doing quite well because of the federal largess thrown their way.  Most of them just happen to be located around New York City and the District of Columbia.  You see, the U.S. stock and bond markets are at, or near all-time highs.  Real estate in Manhattan and Washington, D.C. has bounced back nicely and are both at all-time highs.  Even the Contemporary Art market in the Big Apple has seen sales skyrocket in spite of higher prices.

But, this is predictable given that New York and the nation’s capital is where the Wall Street/Washington Axis of Financial Evil is headquartered.  It is where that axis prints the new money and injects it into the economy through its well-connected surrogates – i.e the “too big to fails”.

And it is all done in the name of stabilizing prices so the rest of us don’t suffer so much.  How nice it is that the powers that be are looking out for us working folk!

Don’t be fooled for a moment.

The financial establishment in this country, which includes the Federal Reserve and its “too big to fail” cronies, knew exactly what it was doing.  Through monetizing federal debt, a series of quantitative easing schemes and holding interest rates below market prices the banking establishment has succeeded at stabilizing the cost of living above market levels.  Put another way, if left to its own devices with no monetary easing from the Fed, the market would have rid itself of all the mal-investment built up from the previous Fed induced false boom period (housing boom).

Consequently, housing prices would be lower, commodity prices would be lower; in fact general price inflation would be lower.  The cost of hiring new workers would be lower causing an employment recovery.  Savers would have gotten a decent return on their money.  In short, working class Americans would have seen an enhancement in their standard of living.

On the flip side, many rich folks would have been devastated.  Their stock and bond portfolios would have been decimated.  Many would have lost their jobs through bankruptcy and restructuring.  The value of their homes wouldn’t have been restored on the backs of working men and women.

This is what should have happened.  After all, they caused the crisis along with their accomplices in government.  Didn’t they deserve the consequences of their actions?  That is capitalism.  That is the American way.

Article first published as Gap Between Rich and Poor Rooted in Government Policy on Blogcritics.

Kenn Jacobine teaches internationally and maintains a summer residence in North Carolina

A Different Perspective on Guns

As someone who has lived in four different countries and traveled to several others over the last eleven years, I can tell you that no people who I have encountered continually demand that their government institutions solve every problem imaginable like Americans do.  From the dangers of electric garage doors to the eradication of bed bugs, there seems to be nothing that Washington isn’t charged with fixing.

Then, there are those horrific incidents of violence perpetrated by a mentally unstable person that sends many Americans into a tizzy and raises their collective voices for Washington to do something urgently.  Cries of, “this can never happen again”, call out for new laws and measures to prevent future tragedies.

And so, we have the latest episode of hysterics over the tragedy that was the Sandy Hook Elementary School killings.

To be sure, whenever any young children lose their lives it is a tragedy.  Whether they are in the classrooms of America’s schools, in cars on America’s streets, or collateral damage from an American drone strike over Pakistan, the loss of the young and innocent hits each of us where we live.

But, in the case of the reaction to the latest tragedy, the last thing Washington should do is pass any new gun control legislation including legislation banning so-called “assault rifles”

A little perspective is needed to understand why.  Less than 400 people a year are killed with rifles of all kinds.  According to FBI numbers from 2005 to 2011, hammers and clubs killed more people than rifles in America.  Logically then, shouldn’t hammers and clubs be banned before rifles?  At the very least, shouldn’t a license be required to own one?  Furthermore, why would anyone but construction contractors need to own sledge hammers? Are they not the hammer equivalent to an assault rifle?  Could you imagine going to Lowes to purchase a hammer and having to undergo a background check and a seven day waiting period?  Yet, this is the conversation our leaders are having about rifles, which again, kill fewer people than hammers and clubs each year.

But there is more.  America has not experienced a direct danger from a foreign adversary since the War of 1812 (One could argue that Pearl Harbor was about the Japanese only wanting to cripple our Pacific fleet to allow Her free rein over the islands of the Pacific Ocean).  Yet we have sent millions of young people into harm’s way to “defend” our freedom and have lost hundreds of thousands doing so.  Were the lives of those young people less worthy than the youth lost at Sandy Hook? – Of course not.  But, our leaders tell us that freedom has costs and the hundreds of thousands of young men and women that gave their lives “defending” our freedom is a large part of that cost.

So, I submit to you that those twenty children who lost their lives at Sandy Hook Elementary are also a part of the cost of defending freedom.  At the end of the day, individuals have a natural right to self-defense.  They have a right to defend themselves against criminals, foreign invaders, and their own government if it becomes tyrannical enough.  Why should law-abiding citizens be asked to unilaterally disarm because a deranged individual used a gun to murder children? It is nonsensical.

Besides, we have tried prohibition before, first with booze in the 1920s and currently with drugs.  It did not prevent people from getting a drink or a joint.  Why would we think it would be different with guns?

Lastly, children die in car accidents, drown in bathtubs, and are poisoned by ingesting prescription drugs all the time.  Does this warrant the banning of these items?  Of course not, because they are vitally important to modern life just like the means to protect oneself is.

Kenn Jacobine teaches internationally and maintains a summer residence in North Carolina