Tuesday, December 11, 2007

What is Wrong!

Edward Hugh usually comes up with a useful set of graphs and charts, and does a superb job this time. I gaze at his material on Japan, and wonder how the context differs from the American outlook. I believe there is a deep-rooted similarity in the attitude among both Japanese and American Consumers. They perceive relatively stagnant Wages, overall rising Prices, and Businesses making a healthy Profit from the Price raises. Everything is attacking their standard of living, as the big Business interests rejoice at the Cost increases where they draw a likely 12% Profit from the increase. Of course, only the Money men and the Corporate environment feels such joy; small business join the Consumers in bemoaning the loss of economic viability.

Jeff Cornwall may have pinpointed the problem exactly. Small business optimism dropped with the Fed rate cut in September. Small businessmen recognize what is generated in an economy when there are heavy inflationary pressures, and Government thinks to flood the Markets with easy Cash–high Inflation. The later is far worse for small business finance than is even a Recession. Small Business remains based on provision of Goods and Services of basic nature to Consumers, and actually wear well under recessionary conditions; that is, they would if they had a Source of reasonable Credit, which they will not have with Inflation rates approaching 5%. They still can acquire adequate business finance, but they also know that the Fed and Congress are planning to open the economy up to heavy Inflation.

This may be why We have such a poor operational system of a Democracy. Candidates slam early primary States, spending Big Bucks, promising great things, and presenting a Vision of Greatness to a few million Voters. All hope to gain the cherished momentum which is continually echoed by the lunatic fringe (modern Journalism). The Millions spent in these States have disappeared by November Election Day, but so has the Promises and images of Greatness; still, We are left with the repetitious tarnished Candidates. The worst element comes in the permanence of Special Interest policy in Washington, they who paid for the charade in the first place. lgl

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