I watched another one of Mr. Obama’s speech a couple of days ago on television. I couldn’t help but feel I was being sold a bill of goods. I couldn’t help but feel I was being asked to buy something I knew I couldn’t afford and was likely not going to use. I felt as if I had answered the door and let a slick talking vacuum cleaner salesman into my home because he seemed like such a charming person. He proceeds to try to sell me some vacuum cleaner/radio/mp3player/toaster/juicer all in one for several thousand dollars on easy terms when I know I can go out and get all these things separately for a few hundred. Like most good salesmen, his aim is to make the insensible seem sensible, to make the product sound indispensable and to make the price sound fair and equitable. I’m not buying. I simply can’t afford it today.
What sticks out in my mind most about Mr. Obama’s speech is the word “credit.” He kept talking about how much we needed the flow of credit. He kept talking about how much we need credit to get out of this mess which was created because of too much debt that could not be paid. It just made no sense to me. This got me to thinking, who benefits from credit? Who is likely to profit and who is likely to pay? Admittedly this is not always such a simple question, but it seems to me that in today’s United States of America, it is the banks who are profiting and the taxpayers who are footing the bill.
Credit is like gambling, at least when one is the creditor. One is taking a chance that the money loaned out will not be paid back. I am reminded of a time some “friends” came in from Minnesota and needed fifty dollars for gas to get back home. I “loaned” them the money with the complete understanding (in my own head, I didn’t express this thought to them) that I most likely would not be paid back. Had they needed more, they would have been out of luck. If one is going to extend credit to another then they should make sure they only loan money they can afford to lose. It seems to me that modern banks don’t have to worry about that since they don’t have to worry about losing anything. Such is the nature of fractional reserve banking and government guarantees. And it has now been shown to us that when they get into trouble they can simply threaten the cowardly politicians of this nation with financial meltdown and societal upheaval and a bailout will be forthcoming.
Yes, it is true that sometimes a loan will help out all parties involved, more often than not it is the lender who truly profits. If one uses credit to pay for a product, likely one will end up paying more for that product than one should. This extra cost doesn’t go to the manufacturer, but to the bank that loaned the money. It seems to me that the consumer would have been better off had he waited to purchase the product until such a time as he could put aside enough to afford it. I realize and I will be the first to admit that this is not always feasible and that there are situations when credit becomes a necessity, but it seems to me that perhaps our society has over extended its credit system not by buying necessities, but a lavish lifestyle.
So, American families and businesses have been cutting back. They have decided not to spend their money on certain things anymore. Perhaps some have decided to keep their old cars for another year or two rather than buying new. Perhaps others have decided to delay purchasing an insurance policy. Some companies may have decided to lay off some of their employees. Others may have cut back on costs by lowering their inventory levels or by applying modern technology more efficiently. Still others might have decided to pay off as much debt as possible to get out from under the burden of paying interest on loans. Mr. Obama’s speech yesterday made it clear that he didn’t think this was a good idea. Since the private sector has stopped spending, he’s going to make certain the government sector makes up for that lack of spending. He’s going to make certain the debt continues to grow. There’s a huge problem with this. Government money is stolen from the private sector in the form of taxes. Government is spending money in ways private citizens and businesses chose not to spend. Government is spending money the private sector would like to save and the only ones who will profit from this are the banksters, the same ones that demanded hundreds of billions in bailouts from the American tax payers.
The constant contradictions that I heard spilling from Mr. Obama’s mouth confounded me. In one sentence he would talk about how right the ordinary people were in the way they handled their own finances, then he would turn around and talk about how this doesn’t apply to government. As reasons to increase government spending and justify a continuation of bailouts, Mr. Obama cited debatable lessons in history from a viewpoint that many historians might find distorted or a misrepresentation of historical events. He cited the views of economists on “both” sides of the political spectrum who feel that a reduction in spending is the last thing government should do in a recession. It is clear to me that Mr. Obama is refusing to consider differing variations of economic thought. Perhaps it is because he actually believes more government meddling, more borrowing and less freedom for people to conduct their business as they see fit will somehow help the economy, but I get the impression that someone behind the scenes is using him to sell the public a product that most of us realize is poorly designed and too expensive. The Federal Reserve system has never done what it claimed it would do and has cost this country far too much real wealth already.
Let me mention here that when Mr. Obama speaks of history and states that it has provided lessons for us which shows that more government intervention is the way to go, he forgets the lessons of the economic downturn after World War I. With Harding and later Coolidge as presidents we saw little government intervention in the economy and ushered in the roaring 20s, a time of prosperity. After the stock market crash of 1929, when first Hoover and later Roosevelt bullied the United States congress into intervening to try to prevent an economic calamity, we ushered in a time of government interference in the private sector and experienced a long and drawn out depression which only ended with the occurrence of a sad and destructive war.
As for Mr. Obama’s reference to economists on the “right” and the “left” side of the political aisle agreeing on spending, I would politely remind Mr. Obama that there are more than two schools of political thought in the world and to pigeon hole every issue into two arguments, whether referred to as left or right, liberal or conservative, or whatever label you would put on them, is an over simplification and a disservice to mankind. Furthermore, I would remind him that economists are human beings and can be wrong even when they agree. More importantly, they can be trained or paid to present ideas in such a way as to support a particular political philosophy or agenda. In this case it seems that agenda is control of our economy by the unholy marriage of bankers and their political puppets. This is the same game that has been being played for hundreds of years and the public still doesn’t seem to catch on. The rich and powerful stay rich and powerful and ordinary people continue to get screwed.
I will not buy Mr. Obama’s sales pitch. I do not believe that increased government spending and more government intervention into our economy is the way to bring prosperity back to the nation. This is the same old argument that has been used time and again, from Wilson to Bush Jr., to keep increasing the size and intrusiveness of government. There are several other avenues we have yet to travel down. We have always had the option to explore these various economic philosophies, but have never been brave enough to cast off the chains that bind us to the old ways and implement meaningful change that will result in equitable opportunity and prosperity for all who would participate.
Yesterday there were many, many tea party events held across the country to protest taxes. I hope the protests do not stop there. I hope that tax protests are not co-opted by any political party in an effort to further an agenda that maintains the status quo and the power of the banksters. It is time to demand accountability in and from the system. It is time to demand an audit of the Fed, something that has never been done. It seems the Fed is above the law and beyond oversight. If Mr. Obama is truly the champion of change as he says he is, then perhaps he will lead the charge to see that this happens. Audit the Fed, expose its corrupt nature, and perhaps the American people can begin to recover the trillions of dollars that haven’t been accounted for in recent years. Perhaps after it has been audited and those who own it held accountable for their actions, the Fed can be ended and their notes replaced with honest money. It might be nice to see the words “US Treasury Note” instead of “Federal Reserve Note” on a dollar bill again. It might be nice to carry around and circulate genuine gold and silver coins once again. At the very least, that would be a good start.