Revisionist Theory

Daniel Gross highlights the fallacy of comparing the current Crisis to the Great Depression. Right or Wrong, his comparisons all end up viewing the alternate Conditions of the two Periods, rather than the root causation of the Two. He makes a powerful argument, but also a hollow thesis. We have instituted massive programs to cancel the Results of adverse Conditions, but is there an substantial improvement in the actual curative treatment of the Economy? We are close to Eighty years away from the impulses inciting the Great Depression, and still not sure what impelled the economic breakdown, or can even answer whether We endure a repetition of the horror.

My thesis, fortified by the knowledge that all good Economists will think it to be Bull, states that Everyone pushes what seems to work farther than it can work. Social Welfare Spending may have reached its apex; further devotion of assets may only generate less economic production as excess funds absorbed reduce Production. The Liquidity issue may become self-defeating, as it narrows the Profitability of Investment by low Returns, while pressures on Resources bring high Price increases, and saturation of Consumption markets constrict viable Employment in the sectors. The promotion of Business through low Business taxation obviously promotes spurious Capitalization of Business ventures to escape taxation, while low Business taxes require Consumers to replace the funds; their increased Tax burden eventually translated into reduced Consumption. The Economy is a complex snarl, reminiscent of the Tower of Babel, where humans are challenging the powers of God.

I must first take that all these measures of various types can be introduced, and they may appear to work for years or decades. There is a maxima and a minima to such initiatives; definite boundaries beyond which these efforts are counter-productive. It is my Contention that all the Measures adopted since the Crash of 1929 have functionally ran their course, distorted the Economy with artificial funding of unusual economic activities, and introduced a false Price mechanism to the Commodities markets; the End-Result being that Production Costs have been woefully inflated, to the detriment of normal Profit ratios. We witness a process where industry capable of normal Business Profits under normal Production Costs cannot survive under the new Price structure for Resources. Further economic propellent simply will drive an increasing share of Business into Bankruptcy, when and if they are dependent on normal Production Costs. I believe We extended beyond the maxima boundary of Business promotion with the Bush Tax Cuts, and the slowed development of the World finally forced American Business back to a normal Production matrix; one dependent on normal Production Costs. Continued Economic propellents may yet cause another Depression. lgl