Economics.. Joe style

Why do people still say to let the economy fix itself? I mean, really? Largest downturn since the Great Depression, where 25% of American citizens were without work?

Let's think about this for a second. Even if you doubt whether FDR's New Deal got us out of the Great Depression, one has to admit that it did get people into jobs and America's spirit back up. Moreover, if one says that it wasn't government intervention that restarted the economy, then it was MOST DEFINITELY the American entrance into WWII, which got industry moving in a forward motion to support the war, and got American into "jobs" as soldiers.

Now, fast forward to today's economy. Argue or not, the past 8 (read: 20 tbh, including Clinton) years our nation's spending has skyrocketed due to "wars" and other assorted objects of desire for the administrations: so much for small government and spending on the Republicans' half. In addition to that, the people that control the money in American (bankers, the stock market, because they really do..) have gotten entirely too overconfident.

Some examples of how this overconfidence has gotten us into this quagmire..
1) Oil prices have (had until the economic downturn) soared on the backs of the market-based oil economy. i.e. investors put money into oil, forcing the prices to go up, thusly, these speculators make money as the oil prices rise and the average person suffers. That may not be entirely true, but that is some truth in it.
2) The housing collapse was based on similar principles. Banks were giving cheap (bad) mortgages to people who didn't need to be buying houses. They banked on the assumption that housing prices would continue to rise and people could use the inherent worth of their homes to continue borrowing money etc. Unfortunately, this scheme fell apart when enough people couldn't sell their homes. Thusly, we are in a home-owning crisis.
3) The boys on Wall Street, I really don't know what to say about that. All I know is people stopped borrowing from the banks, thusly the economy slowed. When that happens, the markets fall. Although these big corporations were not making money, they were still paying executives upwards of $500k for taking them into bankruptcy. When the markets fall, everyone else falls because investments (retirements) lose money and now noone can retire. Only there are less jobs to get because the companies aren't making money from the slow economy and noone is investing funds into their stock, therefore they aren't getting outside cash flow.

Now, on the stimulus package on in Congress.
Republicans argue that we need smaller government and less spending. FACT. This is completely true, as a country we are overspending and overreaching our bounds. Although I'm not sure why express concern, because we have been doing it for 50 years.

Democrats argue that the stimulus needs to happen now. FACT. Obviously, this is true, our economy is in a downward spiral (although one may argue that the markets have reached their bottoms, around 8000 in the Dow). Although I generally believe in the invisible hand, I don't think now is the time to rely on that hand. We need to at least do something to help it along. The economy won't correct itself for no reason. People aren't just going to go out and start changing their ways and spend in a BAD economy. It's contradictary! You save money when the money is tight, not spend it. It makes sense. Therefore, you have to have a STIMULUS to make people start spending, lending, and borrowing again. Thus, government intervention. It's not Socialism, it's called reason.

Although I do not believe that the current stimulus package is the best that it could be (it is not at all bipartisan on the House side), we need to get something in the barrell right now. This could, and it may could not, but we shall see, be what the economy needs right now.

On Obama, I like him. I have a theory that the President is really just a figurehead, he is a person to "lead" the nation, i.e. speak for it. He doesn't actually do much of a ruling of the country (except for instance executive orders like closing down GB). Therefore, there is no better person than a person who speaks well. And speaks well, at least some of the time, for the average person in America.

However, I do not particularly like the way he has started off his administration this year. 3 nominated candidates for White House positions have tax leins because they failed to pay their taxes? Why is this? Of course one of them, at least, may have just been confused (the lady who simply failed to pay a nanny tax of some sort), but still there is little excuse for this lack of foresite. Furthermore, I think the main problem that some people have in relation to the administration and the stimulus is that it is not at ALL bipartisan like Obama's campaigns somewhat promised. Of course there is plenty of blame to be placed all around on that fact. Republicans will not concede anything when it comes to spending it seems in Congress. Additionally, the Democrats (especially in the House) have given nothing to the Republicans yet. Of course they really don't have to since AMERICAN voted in Democratic leadership majorities in both houses.

Alas, we shall see what happens with the stimulus in the next few weeks, and then we shall see what happens with the economy in the next few months/year.